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COMMITTEE ON INTERNATIONAL RELATIONS 
COMMITTEE ON FOREIGN RELATIONS 



Legislation on 
Foreign Relations 
Through 1977 



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JOINT COMMITTEE PRINT 



FEBRUARY 1978 



TREATIES AND RELATED MATERIAL 



VOLUME III 



U.S. House of Representatives 
U.S. Senate 



COMMITTEE ON INTERNATIONAL RELATIONS 
COMMITTEE ON FOREIGN RELATIONS 



Legislation on 
Foreign Relations 
Through 1977 




JOINT COMMITTEE PRINT 



VOLUME III 



FEBRUARY 1978 
TREATIES AND RELATED MATERIAL 

U.S. House of Representatives 
U.S. Senate 



Printed for the use of the Committees on International Relations and Foreign 
Relations of the House of Representatives and the Senate resi>ectively 



U.S. GOVERNMENT PRINTING OFFICE 
20-039 O WASHINGTON : 1978 



For sale by the Superintendent of Documents. U.S. Government Printing Office 
Washington, D.C. 20402 



COMMITTEE ON INTERNATIONAL RELATIONS 



CLEMENT J. ZABLOCKI. Wisconsin, Chairman 



L. H. FOUNTAIN, North Carolina 
DANTE B. FASCELL, Florida 
CHARLES C. DIGGS, Jr., Michigan 
ROBERT N. C. NIX, Pennsylvania 
DONALD M. FRASER, Minnesota 
BENJAMIN S. ROSENTHAL, New York 
LEE H. HAMILTON, Indiana 
LESTER L. WOLFF, New York 
JONATHAN B. BINGHAM, New York 
GUS YATRON, Pennsylvania 
MICHAEL HARRINGTON, Massachusetts 
LEO J. RYAN, California 
CARDISS COLLINS, Illinois 
STEPHEN J. SOLARZ, New York 
HELEN S. MEYNER, New Jersey 
DON BONKER, Washington 
GERRY E. STUDDS, Massachusetts 
ANDY IRELAND, Florida 
DONALD J. PEASE, Ohio 
ANTHONY C. BEILENSON, California 
WYCHE FOWLER, Jr., Georgia 
E (KIKA) DE LA GARZA, Texas 
GEORGE E. DANIELSON, California 
JOHN J. CAVANAUGH, Nebraska 

John J. Brady, 



WILLIAM S. BROOMFIELD, Michigan 
EDWARD J. DERWINSKI, Illinois 
PAUL FINDLEY, Illinois 
JOHN H. BUCHANAN, Jr., Alabama 
J. HERBERT BURKE, Florida 
CHARLES W. WHALEN, Jr., Ohio 
LARRY WINN, Jr., Kansas 
BENJAMIN A. GILMAN, New York 
TENNYSON GUYER, Ohio 
ROBERT J. LAGOMARSINO, California 
WILLIAM F. GOODLING, Pennsylvania 
SHIRLEY N. PETTIS, California 



Jr., Chief of Staff 



COMMITTEE ON FOREIGN RELATIONS 
JOHN SPARKMAN, Alabama, Chairman 



FRANK CHURCH, Idaho 

CLAIBORNE PELL, Rhode Island 

GEORGE S. McGOVERN, South Dakota 

DICK CLARK, Iowa 

JOSEPH R. BIDEN, Jr., Delaware 

JOHN GLENN, Ohio 
RICHARD STONE, Florida 
PAUL S. SARBANES, Maryland 

MURIEL HUMPHREY, Minnesota 



CLIFFORD P. CASE, New Jersey 
JACOB K. JAVITS, New York 
JAMES B. PEARSON, Kansas 
CHARLES H. PERCY, Illinois 
ROBERT P. GRIFFIN, Michigan 
HOWARD H. BAKER, Jr., Tennessee 



Norvill Jones, Chief of Staff 
(II) 



FOREWORD 



This volume of treaties and related material is part of a three 
volume set of laws and related material frequently referred to by the 
Committees on International Relations of the House of Representa- 
tives and Foreign Relations of the Senate, amended to date and an- 
notated to show pertinent history or cross references. 

Volumes I and II contain legislation and related material and will 
be republished with amendments and additions at the end of each 
annual session of Congress. Volume III which contains treaties and 
related material will not be revised every year, but only as required. 
Interim changes or additions involving treaties and related material 
will be included in Volume II, during those years when Volume III 
is not revised. 

This year the compilation was prepared by Larry Nowels of the 
Foreign Affairs and National Defense Division of the Congressional 
Research Service of the Library of Congress. 

Clement J. Zablocki, 
Committee on International Relations. 
John Sparkman, 
Committee on Foreign Relations. 

(Hi) 



Digitized by the Internet Archive 
in 2013 



http://archive.org/details/legislationonfor00unit_1 



EXPLANATORY NOTE 



All treaties included in this volume, except as noted below, are cur- 
rently in force. The texts of the treaties have been codified, with foot- 
noting, to show them in amended form. Treaties included in the volume 
but not presently in force for the United States are the Convention 
Relating to the Status of Refugees on page 146, the Treaty for the 
Prohibition of Nuclear Weapons in Latin America with Additional 
Protocol on page 848, the U.N. Convention on the Prevention and 
Punishment of Crimes Against Internationally Protected Persons on 
page 20P). and the Interim Agreement on Certain Measures With Re- 
spect to the Limitation of Strategic Offensive Anns on page 48. 

In addition. Reorganization Plan Xo. l ; of 1 i > 7 7 (creating the Inter- 
national Communication Agency; page 166) has not yet entered into 
force but is expected to become effective by July 1. 197*. All other 
material in this volume is in force as of January 1. 1!)7S. 

(V) 



ABBREVIATIONS 



Be vans Treaties and Other International Agree- 
ments of the United States of America, 
1776-1949, compiled under the direc- 
tion of Charles I. Bevans. 

CFR Code of Federal Regulations. 

EAS Executive Agreement Series. 

F.R. Federal Register. 

LNTS League of Nations Treaty Series. 

I Malloy, II Malloy Treaties, Conventions, International 

Acts, Protocols, and Agreements Be- 
tween the United States of America 
and Other Powers, 1776-1909, compiled 
under the direction of the United 
States Senate by William M. Malloy. 

Stat United States Statutes at Large. 

TIAS Treaties and Other International Acts 

Series. 

TS Treaty Series. 

UNTS United Nations Treaty Series. 

U.S.C. United States Code. 

UST United States Treaties and Other Inter- 
national Agreements. 

(VI) 



CONTENTS 



Page 

FOREWORD in 

EXPLANATORY NOTE v 

ABBREVIATIONS vi 

A. FOREIGN ASSISTANCE (See Volume I) : 

B. AGRICULTURAL COMMODITIES 3 

1. Agreement Establishing the International Fund for Agricultural Develop- 
ment 5 

C. THE PEACE CORPS (See Volume I): 

D. ARMS CONTROL AND DISARMAMENT 29 

1. Treaties and Agreements 31 

E. DEPARTMENT OF STATE 87 

1. State Department Procedure on Treaties and Other Interna- 

tional Agreements (partial text of circular 1 75) 89 

2. Organization and Administration 104 

3. Passport Regulations 109 

4. Regulations of the Secretary of State (Acceptance of Gifts and Decora- 

tions from Foreign Governments) 138 

5. Migration and Refugee Assistance 141 

F. INFORMATION AND EDUCATIONAL AND CULTURAL EX- 

CHANGE PROGRAMS 163 

1. United States Information and Educational Exchange Related Mate- 

rials 165 

2. Exchange of Materials and Objects 171 

G. FOREIGN ECONOMIC POLICY: TARIFF AND TRADE LAWS__ 185 

1. Presidential Proclamation 4369 (Agreement on Trade Between the 

United States of America and the Socialist Republic of Romania) 187 

2. The General Agreement on Tariffs and Trade 189 

3. International Wheat Agreement 265 

H. FINANCIAL INSTITUTIONS 291 

1. International Monetary Fund 293 

2. International Bank for Reconstruction and Development (Amended 

Articles of Agreement) 381 

3. International Finance Corporation (Amended Articles of Agreement) __. 405 

4. Inter-American Development Bank (Amended Agreement Establishing 

the Bank) 42 1 

5. International Development Association (Articles of Agreement) 457 

6. Asian Development Bank (Articles of Agreement) 477 

7. African Development Fund (Agreement Establishing the Fund) 509 

8. Settlement of Investment Disputes 536 

(VII) 



VIII 

Page 

I. ENERGY AND NATURAL RESOURCES 555 

1. Agreement on an International Energy Program 557 

J. UNITED NATIONS AND OTHER INTERNATIONAL ORGANIZA- 
TIONS 1 581 

1. Charter of the United Nations (amended) 583 

2. Statute of the International Court of Justice 607 

3. Agreement Between the United Nations and the United States Re- 

garding the Headquarters of the United Nations (amended) 620 

4. Convention on Privileges and Immunities of the United Nations (with 

reservation) 632 

5. Rhodesia Resolution (Security Council Resolution 253) 640 

6. Acts of Terrorism and Crimes Against Internationally Protected Per- 

sons 644 

K. WAR POWERS, COLLECTIVE SECURITY TREATIES, AND RE- 
LATED MATERIAL 653 

1. Presidential Proclamation 2914 (Proclaiming the Existence of a Na- 

tional Emergency) 655 

2. Latin America 657 

3. North Atlantic Treaty (amended) 714 

4. Mutual Defense Treaty Between the United States of America and the 

Republic of the Philippines 718 

5. Security Treaty Between Australia, New Zealand, and the United 

States of America 720 

6. Mutual Defense Treaty Between the United States of America and the 

Republic of Korea (with understanding) 723 

7. Southeast Asia Collective Defense Treaty and Protocol Thereto (with 

understanding) 725 

8. Mutual Defense Treaty Between the United States of America and the 

Republic of China 729 

9. Treaty of Mutual Cooperation and Security Between the United States 

of America and Japan 733 

1 0. Treaty of Friendship and Cooperation with Spain 740 

11. Middle East Resolutions 766 

L. LAW OF THE SEAS AND SELECTED MARITIME LEGISLATION. _ 769 

1 . Law of the Seas 771 

M. AVIATION AND SPACE 799 

1. Convention for the Suppression of Unlawful Seizure of Aircraft 801 

2. Treaty on Outer Space 806 

3. Astronaut Assistance and Return Agreement 812 

4. Convention on International Liability for Damage Caused by Space 

Objects 816 

INDEX 825 



A. FOREIGN ASSISTANCE 

(See Volume I for All Material) 



(1) 



B. AGRICULTURAL COMMODITIES 

CONTENTS 

Page 
1. Agreement Establishing the International Fund for Agricultural De- 
velopment ."» 



(3) 



1. Agreement Establishing the International Fund for 
Agricultural Development ■ 

Done at Rome June 13, 1976; Signed by the President August 15, 1977; Instru- 
ment of acceptance deposited October 4, 1977; Entered into force Novem- 
ber 30, 1977 

Preamble 

Recognizing that the continuing food problem of the world is afflict- 
ing a large segment of the people of the developing countries and is 
jeopardizing the most fundamental principles and values associated 
with the right to life and human dignity ; 

Considering the need to improve the conditions of life in the devel- 
oping countries and to promote socio-economic development within the 
context of the priorities and objectives of the developing countries, 
giving due regard to both economic and social benefits: 

Bearing in mind the responsibility of the Food and Agriculture 
Organization of the United Nations within the United Nations sys- 
tem, to assist the efforts of developing countries to increase food and 
agricultural production, as well as that organization's technical com- 
petence and experience in this field ; 

Conscious of the goals and objectives of the International Develop- 
ment Strategy for the Second United Nations Development Decade 
and especially the need to spread the benefits of assistance to all ; 

Bearing in mind paragraph (f ) of part 2 ("Food") of Section I of 
General Assembly resolution 3202 (S-VI) on the Programme of 
Action on the Establishment of a Xew International Economic Order; 
Bearing in mind also the need for effecting transfer of technology 
for food and agricultural development and Section V ("Food and 
Agriculture") of General Assembly resolution 3362 (S-VII) on de- 
velopment and international economic co-operation, with particular 
reference to paragraph 6 thereof regarding the establishment of an 
International Fund for Agricultural Development : 

Recalling paragraph 13 of General Assembly resolution 3348 
(XXIX) and resolutions I and II of the World Food Conference on 
the objectives and strategies of food production and on the priorities 
for agricultural and rural development ; 

Recalling resolution XIII of the "World Food Conference which 
recognized : 

(i) the need for a substantial increase in investment in agricul- 
ture for increasing food and agricultural production in the devel- 
oping countries; 

(ii) that provision of an adequate supply and proper utilization 
of food are the common responsibility of all members of the inter- 
national community ; and 

(iii) that the prospects of the world food situation call for 
urgent and co-ordinated measures by all countries ; 

1 TIAS 8765. 

(5) 



6 

and which resolved : 

that an International Fund for Agricultural Development should 
be established immediately to finance agricultural development 
projects primarily for food production in the developing coun- 
tries; 
The Contracting Parties have agreed to establish the International 
Fund for Agricultural Development, which shall be governed by the 
following provisions : 

Article 1 

definitions 

For the purposes of this Agreement the terms set out below shall 
have the following meaning, unless the context otherwise requires : 

(a) "Fund" shall mean the International Fund for Agricultural 
Development ; 

(b) "food production" shall mean the production of food including 
the development of fisheries and livestock ; 

(c) "State" shall mean any State, or any grouping of States eligible 
for membership of the Fund in accordance with Section 1(b) of 
Article 3; 

(d) "freely convertible currency" shall mean: 

(i) currency of a Member which the Fund determines, after con- 
sultation with the International Monetary Fund, is adequately 
convertible into the currencies of other Members for the purposes 
of the Fund's operations ; or 

(ii) currency of a Member which such Member agrees, on terms 
satisfactory to the Fund, to exchange for the currencies of other 
Members for the purposes of the Fund's operations. 
"Currency of a Member" shall, in respect of a Member that is a group- 
ing of States, mean the currency of any member of such grouping ; 

(e) "Governor" shall mean a person whom a Member has desig- 
nated as its principal representative at a session of the Governing 
Council ; 

(f ) "votes cast" shall mean affirmative and negative votes. 

Article 2 
objective and functions 

The objective of the Fund shall be to mobilize additional resources 
to be made available on concessional terms for agricultural develop- 
ment in developing Member States. In fulfilling this objective the 
Fund shall provide financing primarily for projects and programmes 
specifically designed to introduce, expand or improve food produc- 
tion systems and to strengthen related policies and institutions within 
the framework of national priorities and strategies, taking into con- 
sideration: the need to increase food production in the poorest food 
deficit countries ; the potential for increasing food production in other 
developing countries ; and the importance of improving the nutritional 
level of the poorest populations in developing countries and the con- 
ditions of their lives. 



7 

Article 3 

membership 

Section 1 — Eligibility for membership 

(a) Membership of the Fund shall be open to any State member of 
the United Nations or of any of its specialized agencies, or of the In- 
ternational Atomic Energy Agency. 

(b) Membership shall also be open to any grouping of States whose 
members have delegated to it powers in fields falling within the 
competence of the Fund, and which is able to fulfill all the obligations 
of a Member of the Fund. 

Section 2 — Original Mi mbers and non-original Members 

(a) Original Members of the Fund shall be those States listed in 
Schedule I, which forms an integral part of this Agreement, that 
become parties to this Agreement in accordance with Section 1(b) of 
Article 13. 

(b) Non-original Members of the Fund shall be those other States 
that, after approval of their membership by the Governing Council, 
become parties to this Agreement in accordance with Section 1(c) 
of Article 13. 

Section 3 — Classification of Members 

(a) Original Members shall be classified in one of three categories: 
I. IT or III as set forth in Schedule I to this Agreement. Xon-original 
Members shall be classified by the Governing Council, by a two-thirds 
majority of the total number of votes, with the concurrence of such 
Members, at the time of the approval of their membership. 

(b) The classification of a Member may be altered by the Governing 
Council, by a two-thirds majority of the total number of votes, with 
the concurrence of that Member. 

Section 4 — Limitation of liability 

No Member shall be liable, by reason of its membership, for acts or 
obligations of the Fund. 

Article 4 

resources 
Section 1 — Resources of the Fund 

The resources of the Fund shall consist of : 
(i) initial contributions; 
(ii) additional contributions; 

(iii) special contributions from non-member States and from 
other sources; 

(iv) funds derived from operations or otherwise accruing to 
the Fund. 

Section 2 — Initial contributions 

(r) Each original Member in category I or II shall, and any orig- 
inal Member in category III may, contribute to the initial resources 
of the Fund the amount expressed in the currency specified in the 



8 

instrument of ratification, acceptance, approval or accession deposited 
by that State pursuant to Section 1(b) of Article 13. 

(b) Each non-original Member in category I or II shall, and any 
non-original Member in category III may, contribute to the initial 
resources of the Fund an amount agreed between the Governing 
Council and that Member at the time of the approval of its member- 
ship. 

(c) The initial contribution of each Member shall be due and pay- 
able in the forms set forth in Section 5 (b) and (c) of this Article, 
either in a single sum or, at the option of the Member, in three equal 
annual instalments. The single sum or the first annual instalment 
shall be due on the thirtieth day after this Agreement enters into 
force with respect to that Member ; and second and third instalments 
shall be due on the first and on the second anniversary of the date on 
which the first instalment was due. 

Section 3 — Additional contributions 

In order to assure continuity in the operations of the Fund, the 
Governing Council shall periodically, at such intervals as it deems 
appropriate, review the adequacy of the resources available to the 
Fund ; the first such review shall take place not later than three years 
after the Fund commences operations. If the Governing Council, as 
a result of such a review, deems it necessary or desirable, it may 
invite Members to make additional contributions to the resources 
of the Fund on terms and conditions consistent with Section 5 of this 
Article. Decisions under this Section shall be taken by a two-thirds 
majority of the total number of votes. 

Section k — Increases in contributions 

The Governing Council may authorize, at any time, a Member to 
increase the amount of any of its contributions. 

Section 5 — Conditions governing contributions 

(a) Contributions shall be made without restrictions as to use and 
shall be refunded to contributing Members only in accordance with 
Section 4 of Article 9. 

(b) Contributions shall be made in freely convertible currencies 
except that Members in category III may pay contributions in their 
own currencv whether or not it is freely convertible. 

(c) Contributions to the Fund shall be made in cash or, to the 
extent that any part of such contributions is not needed immediately 
by the Fund in its operations, such part may be paid in the form of 
non-negotiable, irrevocable, non-interest bearing promissory notes or 
obligations payable on demand. In order to finance its operations, the 
Fund shall draw down all contributions (regardless of the form in 
which they are made) as follows : 

(i) contributions shall be drawn down on a pro rata basis over 
reasonable periods of time as determined by the Executive Board ; 

(ii) where a contribution is paid partly in cash, the part so paid 
shall be drawn down, in accordance with paragraph (i), before 
the rest of the contribution. Except to the extent that the part paid 
in cash is thus drawn down, it may be deposited or invested by the 
Fund to produce income to help defray its administrative and 
other expenditures ; 



9 

(iii) all initial contributions, as well as any increases in them, 
shall be drawn down before any additional contributions are 
drawn down. The same rule shall apply to further additional 
contributions. 

Section 6 — Special contributions 

The resources of the Fund may be increased by special contributions 
from non-member States or other sources on such terms and condi- 
tions, consistent with Section 5 of this Article, as shall be approved 
by the Governing Council on the recommendation of the Executive 
Board. 

Article 5 

currencies 

Section 1 — Use of currencies 

(a) Members shall not maintain or impose any restriction on the 
holding: or use by the Fund of freely convertible currencies. 

(b) The currency of a Member in category III paid to the Fund 
on account of that Member's initial or additional contributions may 
be used by the Fund, in consultation with the Member concerned, 
for the payment of administrative expenditures and other costs of the 
Fund in the territories of that Member, or. with the consent of that 
Member, for the payment of goods or services produced in its terri- 
tories and required for activities financed by the Fund in other States. 

Section 2 — Valuation of currencies 

(a) The unit of account of the Fund shall be the Special Drawing 
Right of the International Monetary Fund. 

(b) For the purposes of this Agreement, the value of a currency 
in terms of the Special Drawing Right shall be calculated in accord- 
ance with the method of valuation applied by the International Mone- 
tary Fund, provided that : 

(i) in the case of the currency of a member of the International 
Monetary Fund for which such value is not available on a current 
basis, the value shall be calculated after consultation with the 
International Monetary Fund ; 

(ii) in the case of the currency of a non-member of the Inter- 
national Monetary Fund, the value of the currency in terms of the 
Special Drawing Right shall be calculated by the Fund on the 
basis of an appropriate exchange rate relationship between that 
currency and the currency of a member of the International 
Monetary Fund for which a value is calculated as specified above. 

Article 6 

organization and management 

Section 1— Structure of the Fund 

The Fund shall have: (a) A Governing Council; (b) an Executive 
Board; and (c) a President and such staff as shall be necessary for the 
Fund to carrv out its functions. 



20-039 O - 78 



10 

Section 2 — The Governing Council 

(a) Each Member shall be represented on the Governing Council 
and shall appoint one Governor and an alternate. An alternate may 
vote only in the absence of his principal. 

(b) All the powers of the Fund shall be vested in the Governing 
Council. 

(c) The Governing Council may delegate any of its powers to the 
Executive Board with the exception of the power to : 

(i ) adopt amendments to this Agreement ; 

(ii) approve membership and determine the classification or 
reclassification of Members ; 

(iii) suspend a Member ; 

(iv) terminate the operations of the Fund and distribute its 
assets ; 

(v) decide appeals from decisions made by the Executive Board 
concerning the interpretation or application of this Agreement ; 

(vi) determine the remuneration of the President. 

(d) The Governing Council shall hold an annual session, and such 
special sessions as it may decide, or as are called by Members having 
at least one fourth of the total number of votes in the Governing Coun- 
cil, or as requested by the Executive Board by a two-thirds majority 
of the votes cast. 

(e) The Governing Council may by regulation establish a proce- 
dure whereby the Executive Board may obtain a vote of the Council 
on a specific question without calling a meeting of the Council. 

(f) The Governing Council may, by a two-thirds majority of the 
total number of votes, adopt such regulations and by-laws not incon- 
sistent with this Agreement as may be appropriate to conduct the 
business of the Fund. 

(g) A quorum for any meeting of the Governing Council shall be 
constituted by Governors exercising two-thirds of the total votes of all 
its members, provided that Governors exercising one half of the total 
votes of the Members in each of categories I, II and III are present. 

Section 3 — Voting in the Governing Council 

(a) The total number of votes in the Governing Council shall be 
1,800, distributed equally among categories I, II and III. The votes 
of each category shall be distributed among its members in accordance 
with the formula set out for that category in Schedule II. which 
forms an integral part of this Agreement. 

(b) Except as otherwise specified in this Agreement, decisions of 
the Governing Council shall be taken by a simple majority of the 
total number of votes. 

Section 4 — Chairman of the Governing Council 

The Governing Council shall elect a Chairman from among the 
Governors, who shall serve for two years. 

Section^ — Executive Board 

(a) The Executive Board shall be composed of 18 Members of 
the Fund, elected at the annual session of the Governing Council. 
The Governors from the Members of each category shall, in accord- 



11 

ance with procedures set out or established as provided in Schedule II 
for that category, elect six members of the Executive Board from 
among the Members in that category, and may similarly elect (or. 
in respect of category I, provide for the appointment of) up to six 
alternates, who may vote only in the absence of a member. 

(b) Members of the Executive Board shall serve ,for a term of 
three years. However, unless otherwise provided in or in accordance 
with Schedule II, at the first election two members in each category 
shall be designated to serve for one year, and two to serve for two 
years. 

(c) The Executive Board shall be responsible for the conduct of 
the general operations of the Fund, and for this purpose shall exer- 
cise the powers given to it by this Agreement or delegated to it by 
the Governing Council. 

(d) The Executive Board shall meet as often as the business of 
the Fund may require. 

(e) The representatives of a member or of an alternate member 
of the Executive Board shall serve without remuneration from the 
Fund. However, the Governing Council may decide the basis on 
which reasonable travel and subsistence expenses may be granted 
to one such representative of each member and of each alternate 
member. 

(f ) A quorum for any meeting of the Executive Board shall be con- 
stituted by members exercising two thirds of the total votes of all 
its members, provided that members exercising one half of the total 
votes of the members in each of categories I, II and III are present. 

Section 6 — Voting in the Executive Board 

(a) The total number of votes in the Executive Board shall be 
1,800, distributed equally among categories I. II and III. The votes 
of each category shall be distributed among its members in accordance 
with the formula set out for that category in Schedule II. 

(b) Except as otherwise specified in this Agreement, decisions of 
the Executive Board shall be taken by a majority of three fifths of 
the votes cast, provided that such majority is more than one half of 
the total number of votes of all members of the Executive Board. 

Section 7 — Chairman of the Executive Board 

The President of the Fund shall be the Chairman of the Executive 
Board and shall participate in its meetings without the right to vote. 

Section 8 — President and staff 

(a) The Governing Council shall appoint the President by a two- 
thirds majority of the total number of votes. He shall be appointed 
for a term of three years and shall be eligible for reappointment for 
only one further term. The appointment of the President may be termi- 
nated by the Governing Council by a two-thirds majority of the total 
number of votes. 

(b) The President may appoint a Vice-President, who shall perform 
such duties as shall be assigned to him by the President. 

(c) The President shall head the staff and. under the control and 
direction of the Governing Council and the Executive Board, shall be 
responsible for conducting the business of the Fund. The President 



12 

shall organize the staff and shall appoint and dismiss members of the 
staff in accordance with regulations adopted by the Executive Board. 

(d) In the employment of the staff and in the determination of the 
conditions of service consideration shall be given to the necessity of 
securing the highest standards of efficiency, competence and integrity 
as well as to the importance of observing the criterion of equitable 
geographical distribution. 

(e) The President and the staff, in the discharge of their functions, 
owe their duty exclusively to the Fund and shall neither seek nor 
receive instructions in regard to the discharge thereof from any au- 
thority external to the Fund. Each Member of the Fund shall respect 
the international character of this duty and shall refrain from any 
attempt to influence them in the discharge of their duties. 

(,f ) The President and the staff shall not interfere in the political 
affairs of any Member. Only development policy considerations shall 
be relevant to their decisions and these considerations shall be weighed 
impartially in order to achieve the objective for which the Fund was 
established. 

(g) The President shall be the legal representative of the Fund. 

(h) The President, or a representative designated by him, may 
participate, without the right to vote, in all meetings of the Governing 
Council. 

Section 9 — Seat of the Fund 

The Governing Council shall determine the permanent seat of the 
Fund by a two-thirds majority of the total number of votes. The pro- 
visional seat of the Fund shall be in Rome. 

Section 10 — Administrative budget 

The President shall prepare an annual administrative budget which 
he shall submit to the Executive Board for transmission to the Govern- 
ing Council for approval by a two-thirds majority of the total number 
of votes. 

Section 11 — Publication of reports and provision of information 

The Fund shall publish an annual report containing an audited state- 
ment of its accounts and, at appropriate intervals, a summary state- 
ment of its financial position and of the results of its operations. 
Copies of such reports, statements and other publications connected 
therewith shall be distributed to all Members. 

Article 7 

operations 

Section 1 — Use of resources and conditions of financing 

(a) The resources of the Fund shall be to achieve the objective 
specified in Article 2. 

(b) Financing by the Fund shall be provided only to developing 
States that are Members of the Fund or to intergovernmental organi- 
zations in which such Members participate. In the case of a loan to an 
intergovernmental organization, the Fund may require suitable gov- 
ernmental or other guarantees. 



13 

(c) The Fund shall make arrangements to ensure that the proceeds 
of any financing are used only for the purposes for which the financ- 
ing was provided, with due attention to considerations of economy, 
efficiency and social equity. 

(d) In allocating its resources the Fund shall be guided by the fol- 
lowing priorities : 

(i) the need to increase food production and to improve the 
nutritional level of the poorest populations in the poorest food 
deficit countries ; 

(ii) the potential for increasing food production in other devel- 
oping countries. Likewise, emphasis shall be placed on improving 
the nutritional level of the poorest populations in these coun- 
tries and the conditions of their lives. 
Within the framework of the above-mentioned priorities, eligibility 
for assistance shall be on the basis of objective economic and social 
criteria with special emphasis on the needs of the low income coun- 
tries and their potential for increasing food production, as well as due 
regard to a fair geographic distribution in the use of such resources. 

(e) Subject to the provisions of this Agreement, financing by the 
Fund shall be governed by broad policies, criteria and regulations laid 
down, from time to time, by the Governing Council by a two-thirds 
majority of the total number of votes. 

Section % — Forms and terms of financing 

(a) Financing by the Fund shall take the form of loans and grants, 
which shall be provided on such terms as the Fund deems appropriate, 
having regard to the economic situation and prospects of the Member 
and to the nature and requirements of the activity concerned. 

(b) The proportion of the Fund's resources to be committed in any 
financial year for financing operations in either of the forms referred 
to in subsection (a) shall be decided from time to time by the Execu- 
tive Board with due regard to the long-term viability of the Fund and 
the need for continuity in its operations. The proportion of grants 
shall not normally exceed one-eighth of the resources committed in 
any financial year. A large proportion of the loans shall be provided 
on highly concessional terms. 

(c) The President shall submit projects and programmes to the 
Executive Board for consideration and approval. 

(d) Decisions with regard to the selection and approval of projects 
and programmes shall be made by the Executive Board. Such deci- 
sions shall be made on the basis of the broad policies, criteria and reg- 
ulations established by the Governing Council. 

(e) For the appraisal of projects and programmes presented to it 
for financing, the Fund shall, as a general rule, use the services of in- 
ternational institutions and may, where appropriate, use the services 
of other competent agenda specialized in this field. Such institutions 
and agencies shall be selected by the Executive Board after consulta- 
tion with the recipient concerned and shall be directly responsible to 
the Fund in performing the appraisal. 

(f ) The loan agreement shall be concluded in each case by the Fund 
and the recipient, which shall be responsible for the execution of the 
project or programme concerned. 



14 

(g) The Fund shall entrust the administration of loans, for the 
purposes of the disbursement of the proceeds of the loan and the super- 
vision of the implementation of the project or programme concerned, 
to competent international institutions. Such institutions shall be of 
a world-wide or regional character and shall be selected in each case 
with the approval of the recipient. Before submitting the loan to the 
Executive Board for approval, the Fund shall assure itself that the 
institution to be entrusted with the supervision agrees with the results 
of the appraisal of the project or programme concerned. This shall be 
arranged between the Fund and the institution or agency in charge 
of the appraisal as well as with the institution to be entrusted with 
the supervision. 

(h) For the purposes of subsections (f) and (g) above, references 
to "loans" shall be deemed to include "grants". 

(i) The Fund may extend a line of credit to a national development 
agency to provide and administer subloans for the financing of proj- 
ects and programmes within the terms of the loan agreement and the 
framework agreed to by the Fund. Before the Executive Board ap- 
proves the extension of such a line of credit, the national development 
agency concerned and its programme shall be appraised in accordance 
with the provisions of subsection (e). Implementation of the said pro- 
gramme shall be subject to supervision by the institutions selected in 
accordance with the provisions of subsection (g). 

(j) The Executive Board shall adopt suitable regulations for pro- 
curing goods and services to be financed from the resources of the 
Fund. Such regulations shall, as a general rule, conform to the prin- 
ciples of international competitive bidding and shall give appropriate 
preference to experts, technicians and supplies from developing 
countries. 

Section 3 — Miscellaneous operations 

In addition to the operations specified elsewhere in this Agreement, 
the Fund may undertake such ancillary activities and exercise such 
powers incidental to its operations as shall be necessary in furtherance 
of its objective. 

Article 8 

relations with the united nations and with other organizations, 
institutions and agencies 

Section 1 — Relations with the United Nations 

The Fund shall enter into negotiations with the United Nations 
with a view to concluding an agreement to bring it into relationship 
with the United Nations as one of the specialized agencies referred 
to in Article 57 of the Charter of the United Nations. Any agreements 
concluded in accordance with Article 63 of the Charter require the 
approval of the Governing Council, by a two-thirds majority of the 
total number of votes, upon the recommendation of the Executive 
Board. 

Section 2 — Relations with other organizations, institutions, and 
agencies 
The Fund shall cooperate closely with the Food and Agriculture 
Organization of the United Nations and other organizations of the 



15 

United Nations system. It shall also cooperate closely with other inter- 
governmental organizations, international financial institutions, non- 
governmental organizations and governmental agencies concerned 
with agricultural development. To this end, the Fund will seek the 
collaboration in its activities of the Food and Agriculture Organiza- 
tion of the United Nations and the other bodies referred to above, and 
may enter into agreements or establish working arrangements with 
such bodies, as may be decided by the Executive Board. 

Article 9 

withdrawal, suspension of membership, termination 
of operations 

Section 1 — Withdrawal 

(a) Except as provided in section 4(a) of this Article, a Member 
may withdraw from the Fund by depositing an instrument of denun- 
ciation of this Agreement with the Depositary. 

(b) Withdrawal of a Member shall take effect on the date specified 
in its instrument of denunciation, but in no event less than six months 
after deposit of such instrument. 

Section % — Suspension of membership 

(a) If a Member fails to fulfill any of its obligations to the Fund, 
the Governing Council may, by a three-fourths majority of the total 
number of votes, suspend its membership. The Member so suspended 
shall automatically cease to be a Member one year from the date of 
its suspension, unless the Council decides by the same majority of 
the total number of votes to restore the Member to good standing. 

(b) While under suspension, a Member shall not be entitled to 
exercise any rights under this Agreement except the right of with- 
drawal, but shall remain subject to all of its obligations. 

Section 3 — Rights and duties of States ceasing to be Members 

Whenever a State ceases to be a Member, whether by withdrawal or 
through the operation of Section 2 of this Article, it shall have no 
rights under this Agreement except as provided in this Section or in 
Section 2 of Article 11, but it shall remain liable for all financial obli- 
gations undertaken by it to the Fund, whether as Member, borrower 
or otherwise. 

Section 4- — Termination of operations and distribution of assets 

(a) The Governing Council may terminate the Fund's operations by 
a three-fourths majority of the total number of votes. After such 
termination of operations the Fund shall forthwith cease all activities, 
except those incidental to the orderly realization and conservation of 
its assets and the settlement of its obligations. Until final settlement 
of such obligations and the distribution of such assets, the Fund shall 
remain in existence and all rights and obligations of the Fund and 
its Members under this Agreement shall continue unimpaired, except 
that no Member may be susoended or may withdraw. 

(b) No distribution of assets shall be made to Members until all lia- 
bilities to creditors have been discharged or provided for. The Fund 
shall distribute its assets to contributing Members pro rata to the con- 



16 

tributions that each Member has made to the resources of the Fund. 
Such distribution shall be decided by the Governing Council by a three- 
fourths majority of the total number of votes and shall be effected at 
such times, and in such currencies or other assets as the Governing 
Council shall deem fair and equitable. 

Article 10 
legal status, privileges and immunities 
Section 1 — Legal status 

The Fund shall possess international legal personality. 
Section 2 — Privileges and immunities 

(a) The Fund shall enjoy in the territory of each of its Members 
such privileges and immunities as are necessary for the exercise of its 
functions and for the fulfillment of its objective. Representatives of 
Members, the President and the staff of the Fund shall enjoy such 
privileges and immunities as are necessary for the independent exer- 
cise of their functions in connexion with the Fund. 

(b) The privileges and immunities referred to in paragraph (a) 
shall : 

(i) in the territory of any Member that has acceded to the Con- 
vention on the Privileges and Immunities of the Specialized Agen- 
cies in respect of the Fund, be as defined in the standard clauses of 
that Convention as modified by an annex thereto approved by the 
Governing Council ; 

(ii) in the territory of any Member that has acceded to the Con- 
vention on the Privileges and Immunities of the Specialized Agen- 
cies only in respect of agencies other than the Fund, be as defined 
in the standard clauses of that Convention, except if such Member 
notifies the Depositary that such clauses shall not apply to the 
Fund or shall apply subject to such modifications as may be speci- 
fied in the notification ; 

(iii) be as defined in other agreements entered into by the Fund. 

(c) In respect of a Member that is a grouping of States, it shall en- 
sure that the privileges and immunities referred to in this Article are 
applied in the territories of all members of the grouping. 

Article 11 
interpretation and arbitration 

Section 1 — Interpretation 

(a) Any question of interpretation or application of the provisions 
of this Agreement arising between any Member and the Fund or be- 
tween Members of the Fund, shall be submitted to the Executive Board 
for decision. If the question particularly affects any Member of the 
Fund not represented on the Executive Board, that Member shall be 
entitled to be represented in accordance with regulations to be adopted 
by the Governing Council. 

(b) Where the Executive Board has driven a decision pursuant to 
subsection (a) , any Member may require that the question be referred 



17 

to the Governing Council, whose decision shall be final. Pending the 
decision of the Governing Council, the Fund may, so far as it deems 
necessary, act on the basis of the decision of the Executive Board. 

Section 2 — Arbitration 

In the case of a dispute between the Fund and a State that has ceased 
to be a Member, or between the Fund and any Member upon the 
termination of the operations of the Fund, such dispute shall be sub- 
mitted to arbitration by a tribunal of three arbitrators. One of the 
arbitrators shall be appointed by the Fund, another by the Member or 
former Member concerned and the two parties shall appoint the third 
arbitrator, who shall be the Chairman. If within 45 days of receipt 
of the request for arbitration either party has not appointed an 
arbitrator, or if within 30 days of the appointment of two arbitrators 
the third arbitrator has not been appointed, either party may request 
the President of the International Court of Justice, or such other 
authority as may have been prescribed by regulations adopted by the 
Governing Council, to appoint an arbitrator. The procedure of the 
arbitration shall be fixed by the arbitrators, but the Chairman shall 
have full power to settle all questions of procedure in any case of dis- 
agreement with respect thereto. A majority vote of the arbitrators shall 
be sufficient to reach a decision, which shall be final and binding upon 
the parties. 

Article 12 

amendments 

(a) Except in respect of Schedule II: 

(i) Any proposal to amend this Agreement made by a Member 
or by the Executive Board shall be communicated to the President 
who shall notify all Members. The President shall refer proposals 
to amend this Agreement made by a Member to the Executive 
Board, which shall submit its recommendation thereon to the 
Governing Council. 

(ii) Amendments shall be adopted by the Governing Council 
by a four-fifths majority of the total number of votes. Amend- 
ments shall enter into force three months after their adoption 
unless otherwise specified by the Governing Council, except that 
any amendment modifying : 

(A) the right to withdraw from the Fund; 

(B) the voting majority requirements provided for in this 
Agreement ; 

(C) the limitation on liability provided for in Section 4 
of Article 3; 

(D) the procedure for amending this Agreement; 
shall not come into force until written acceptance of such amend- 
ment by all Members is received bv the President. 

(b) In respect of the several parts of Schedule II, amendments shall 
be proposed and adopted as provided in such parts. 

(c) The President shall immediatelv notify all Members and the 
Depositary of any amendments that are adopted and of the date of 
entry into force of any such amendments. 



18 

Article 13 

final clauses 

Section 1 — Signature, ratification, acceptance, approval, and accession 

(a) This Agreement may be initialled on behalf of the States listed 
in Schedule I to this Agreement at the United Nations Conference on 
the Establishment of the Fund and shall be open for signature at 
the Headquarters of the United Nations in New York by the States 
listed in that Schedule as soon as the initial contributions indicated 
therein to be made in freely convertible currencies amount to at least 
the equivalent of 1,000 million United States dollars (valued as of 
10 June 1976) . If the foregoing requirement has not been fulfilled by 30 
September 1976 the Preparatory Commission established by that 
Conference shall convene by 31 January 1977 a meeting of the States 
listed in Schedule I, which may by a two-thirds majority of each 
category reduce the above specified amount and may also establish 
other conditions for the opening of this Agreement for signature. 

(b) Signatory States may become parties by depositing an instru- 
ment of ratification, acceptance or approval; non-signatory States 
listed in Schedule I may become parties by depositing an instrument 
of accession. Instruments of ratification, acceptance, approval and 
accession by States in category I or II shall specify the amount of 
the initial contribution the State undertakes to make. Signatures may 
be affixed and instruments of ratification, acceptance, approval or 
accession deposited by such States until one year after the entry into 
force of this Agreement. 

(c) States listed in Schedule I that have not become parties to this 
Agreement within one year after its entry into force and States that 
are not so listed, may, after approval of their membership by the 
Governing Council, become parties by depositing an instrument of 
accession. 

Section 2 

(a) The Secretary-General of the United Nations shall be the 
Depositary of this Agreement. 

(b) The Depositary shall send notifications concerning this Agree- 
ment: 

(i) until one year after its entry into force, to the States listed 
in Schedule I to this Agreement, and after such entry into force 
to all States parties to this Agreement as well as to those approved 
for membership by the Governing Council ; 

(ii) to the Preparatory Commission established by the United 
Nations Conference on the Establishment of the Fund, as long as 
it remains in existence, and thereafter to the President. 

Section S — Entry into force 

(a) This Agreement shall enter into force upon receipt by the Deposi- 
tary of instruments of ratification, acceptance, approval or accession 
from at least 6 States in category I, 6 States in category II and 24 
States in category III, provided that such instruments have been 
deposited by States in categories I and II the aggregate of whose ini- 
tial contributions specified in such instruments amounts to at least the 
equivalent of 750 million United States dollars (valued as of 10 June 



19 

1976) , and further provided that the foregoing requirements have been 
fulfilled within 18 months of the date on which this Agreement is 
opened for signature or by such later date as the States that have 
deposited such instruments by the end of that period may decide, by 
a two-thirds majority of each category, and as they notify to the 
Depositary. 

(b) For States that deposit an instrument of ratification, acceptance, 
approval or accession subsequent to the entry into force of this Agree- 
ment, it shall enter into force on the date of such deposit. 

Section 4 — Reservations 

Reservations may only be made to Section 2 of Article 11 of this 
Agreement. 

Section 5 — Authoritative texts 

The versions of this Agreement in the Arabic, English, French and 
Spanish languages shall each be equally authoritative. 

IN WITNESS WHEREOF, the undersigned being duly authorized 
thereto, have signed this Agreement in a single original in the Arabic, 
English. French and Spanish languages. 



Category I 

Australia 

Austria 

Belgium 

Canada 

Denmark 

Finland 

France 

Germany, Federal Re- 
public of 

Ireland 

Italy 

Luxembourg 

Japan 

Netherlands 

New Zealand 

Norway 

Spain 

Sweden 

Switzerland 

United Kingdom of Great 
Britain and Northern 
Ireland 

United States of America 

Category II 

Algeria 

Gabon 

Indonesia 

Iran 

Iraq 

Kuwait 

Libyan Arab Republic 



Schedule I 

Nigeria 

Qatar 

Saudi Arabia 

United Arab Emirates 

Venezuela 

Category III 

Argentina 

Bangladesh 

Bolivia 

Botswana 

Brazil 

Cape Verde 

Chad 

Chile 

Colombia 

Congo 

Costa Rica 

Cuba 

Dominican Republic 

Ecuador 

Egypt 

El Salvador 

Ethiopia 

Ghana 

Greece 

Guatemala 

Guinea 

Haiti 

Honduras 

India 

Israel ' 

Jamaica 

Kenya 



Liberia 

Mali 

Malta 

Mexico 

Morocco 

Nicaragua 

Pakistan 

Panama 

Papua New Guinea 

Peru 

Philippines 

Portugal 

Republic of Korea 

Romania 

Rwanda 

Senegal 

Sierra Leone 

Somalia 

Sri Lanka 

Sudan 

Swaziland 

Syrian Arab Republic 

Thailand 

Tunisia 

Turkey 

Uganda 

United Republic of 

Cameroon 
United Republic of 

Tanzania 
Uruguay 
Yugoslavia 
Zaire 
Zambia 



1 With reference to Article 7, Section Kb) on the use of resources of the Fund for 
developing countries", this country will not be included under this Section and will 
not seek or receive financing from the Fund. 



20 



Part II. — Pledges op Initial Contributions 1 



State and currency unit 



Amount in currency Equivalent in SDR's 2 



CATEGORY I 

Australia: Australian dollar 

Austria: U.S. dollar 

Belgium: 

Belgian franc 

U.S. dollar 

Canada: Canadian dollar 

Denmark: U.S. dollar 

Finland: Finnish markka 

France: U.S. dollar 

Germany, Federal Republic of: U.S. dollar 

Ireland: Pound sterling 

Italy: U.S. dollar 

Japan: U.S. dollar 

Luxembourg: Special drawing right 

Netherlands: 

Dutch guilder 

U.S. dollar 

New Zealand: New Zealand dollar 

Norway: 

Norwegian kroner 

U.S. dollar 

Spain: U.S. dollar 

Sweden: 

Swedish kroner 

U.S. dollar 

Switzerland: Swiss franc 

United Kingdom: Pound sterling 

United States: U.S. dollar 

Subtotal 

CATEGORY II 

Algeria: U.S. dollar 

Gabon: U.S. dollar 

Indonesia: U.S. dollar 

Iran: U.S. dollar 

Iraq: U.S. dollar 

Kuwait: U.S. dollar 

Libyan Arab Republic: U.S. dollar 

Nigeria: U.S. dollar 

Qatar: U.S. dollar 

Saudi Arabia: U.S. dollar 

United Arab Emirates: U.S. dollar 

Venezuela: U.S. dollar 

Subtotal 



8, 000, 000 


8, 609, 840 


4, 800, 000 


4, 197, 864 


500, 000, 000 


11,930,855 


1, 000, 000 




33, 000, 000 


29, 497, 446 


7, 500, 000 


6, 559, 163 


12, 000, 000 


2, 692, 320 


25, 000, 000 


21, 863, 875 


55, 000, 000 


48, 100, 525 


570, 000 


883, 335 


25, 000, 000 


21, 863, 875 


55, 000, 000 


48, 100, 525 


320, 000 


320, 000 


100, 000, 000 


34, 594, 265 


3, 000, 000 




2, 000, 000 


1,721,998 


75, 000, 000 


20, 612, 228 


9, 981, 851 




2, 000, 000 


1,749,110 


100, 000, 000 


22, 325, 265 


3, 000, 000 




22, 000, 000 


7, 720, 790 


18, 000, 000 


27, 894, 780 


200, 000, 000 


174,911,000 




496, 149, 059 






10, 000, 000 


8, 745, 550 


500, 000 


437, 278 


1, 250, 000 


1, 093, 194 


124, 750, 000 


109, 100, 736 


20, 000, 000 


17, 491, 100 


36, 000, 000 


31, 483, 980 


20, 000, 000 


17, 491, 100 


26, 000, 000 


22, 738, 430 


9, 000, 000 


7, 870, 995 


105, 500, 000 


92, 265, 553 


16, 500, 000 


14, 430, 158 


66, 000, 000 


57, 720, 630 




380, 868, 704 






Equivalent 


inSDRV 


Amount in Freely 


Not freely 


currency convertible 


convertible 



CATEGORY III 

Argentina: Argentine peso 

Bangladesh: Taka (equivalent of U.S. dollar) 

Chile: U.S. dollar 

Ecuador: U.S. dollar 

Egypt: Egyptian pound (equivalent of U.S. dollar). 

Ghana: U.S. dollar 

Guinea: Sily 

Honduras: U.S. dollar 

India: 

U.S. dollar 

Indian rupee (equivalent of U.S. dollar) 

Israel: Israel pound (equivalent of U.S. dollar).... 
Kenya: Kenya shilling (equivalent of U.S. dollar).. 

Mexico: U.S. dollar 

Nicaragua: Cordobas 

Pakistan: 

U.S. dollar 

Pakistan rupee (equivalent of U.S. dollar) 

Philippines: U.S. dollar 

Footnotes at end of article. 



240,000,000 1,499,237 

500,000 437,278 

50,000 43,728 

25,000 21,864 

300,000 262,367 

100,000 87,456 

25,000,000 1,012,145 

25,000 21,864 

2,500,000 2,186,388 

2,500,000 . 2,186,388 

150,000 131,183 

1,000,000 874,555 

5,000,000 4,372,775 

200,000 24,894 

500,000 437,278 

500,000 437,278 

250,000 43,728 174,911 



21 



Part II. — Pledges of Initial Contributions ' — Continued 





Amount in 
currency 


Equivalent i 


nSDRV 




Freely 
convertible 


Not freely 
convertible 


Category III— Continued 
Republic of Korea: 

U.S. dollar 


100,000 
100,000 


87,456 




Won (equivalent of U.S. dollar) 


87, 456 


Romania: Lei (equivalent of U.S. dollar) 


1,000,000 




874, 555 


Sierra Leone: Leone 


20,000 

500,000 

500,000 




15, 497 


Sri Lanka: 

U.S. dollar 


437,278 




Sri Lanka rupee (equivalent of U.S. dollar)... 


437, 278 


Syrian Arab Republic: Syrian pound 

Thailand: U.S. dollar 


500,000 . 

100,000 

50,000 




111,409 


87,456 




Tunisia: Tunisian dinar . . 


100,621 


Turkey: Turkish lira (equivalent of U.S. dollar). 


100,000 




87, 456 


Uganda: Uganda shilling 


200,000 




20,832 


United Republic of Cameroon: U.S. dollar 


10,000 
300,000 . 


8,746 




United Republic of Tanzania : Tanzania shilling 


31, 056 


Yugoslavia: Yugoslav dinar (equivalent of U.S. dollar).. 


300,000 . 




262, 367 


Subtotal 




7, 836, 017 


9, 068, 763 








Total freely convertible. . 




> 884, 853, 780 
893, 922 




Grand total (freely and not freely convertible). 




,543 









1 Subject to obtaining, where required, the necessary legislative approval. 

* Special drawing rights (SDR's) of the International Monetary Fund valued as of 10, June 1976. These equivalent 
values are stated merely for information in the light of Section 2(a) of Article 5 of the Agreement, with the understand- 
ing that the initial contributions pledged will be payable in accordance with Section 2(a) of Article 4 of the Agreement in 
the amount and currency specified by the state concerned. 

* Equivalent of U.S. dollars 1,011,776,023 valued as of June 10, 1976. 

Schedule II 



DISTRIBUTION OF VOTES AND ELECTION OF EXECUTIVE BOARD MEMBERS 

Part I : Category I 

Sub-part A : Distribution of votes in the Governing Council. 
Sub-part B : Election of members of the Executive Board and 

their alternates. 
Sub-part C : Distribution of votes in the Executive Board. 
Sub-part D : Amendments. 

Part II: Category II 

Sub-part A : Distribution of votes 
Sub-part B : Election of members 

their alternates. 
Sub-part C : Distribution of votes in the Executive Board 
Sub-part D : Amendments. 

Part III: Category III 

Sub-part A : Distribution of votes 
Sub-part B : Election of members 

their alternates. 
Sub-part C : Distribution of votes in the Executive Board 
Sub-part D : Amendments. 



in the Governing Council, 
of the Executive Board and 



in the Governing Council, 
of the Executive Board and 



Part I: Category I 

A. Distribution of votes in the Governing Council 

1. 17.5 per cent of the votes of category I shall be distributed equally 
among the Members of that category. 



22 

2. The remaining 82.5 per cent of the votes shall be distributed 
among Members of category I in the proportion that each Member's : 

(a) initial contribution as specified in its instrument of ratifi- 
cation, acceptance, approval or accession, and 

(b) additional contributions and increases in contributions 
made in accordance with Section 5(c) of Article 4 bear to the 
aggregate of the contributions of category I Members. 

3. In determining voting power under paragraph 2, contributions 
shall be valued in terms of their equivalent in Special Drawing Rights 
as of the date of the entry into force of the Agreement and thereafter 
whenever there is an increase in the aggregate of the contributions 
of category I Members as a result of a new Member in category I, an 
increase in the contribution of a category I Member or additional 
contributions by category I Members. 

4. In the Governing Council each Governor representing a Member 
in category I shall be entitled to cast the votes of that Member. 

B. Election of members of the Executive Board and their alternates 

1. All of the members and alternate members of the Executive 
Board from category I shall serve for a term of three years, including 
those elected at the first election of members of the Executive Board. 

2. In balloting for the election of members of the Executive Board 
representing Members in category I, each Governor representing such 
a Member shall cast for one nominee all of the votes to which the 
Member which appointed that Governor is entitled. 

3. When on any ballot the number of nominees equals the number of 
members to be elected, each nominee shall be deemed to be elected by the 
number of votes received by him on such ballot. 

4. (a) When on any ballot the number of nominees exceeds the num- 
ber of members to be elected, the six nominees receiving the highest 
number of votes shall be elected, except that no nominee who receives 
less than 9 per cent of the total voting power of category I shall be con- 
sidered as elected. 

(b) If six members are elected on the first ballot, the votes that were 
cast for the nominees not elected shall be deemed to have counted to- 
wards the election of any of six members, as chosen by each Governor 
having such votes. 

5. When six members are not elected on the first ballot, a second bal- 
lot shall be held in which the Member which received the lowest num- 
ber of votes in the preceding ballot shall be ineligible for election and 
in which there shall vote only : 

(a) those Governors who voted in the preceding ballot for a 
nominee not elected, and 

(b) those Governors whose votes for a member elected are 
deemed under paragraph 6 to have raised the votes cast for that 
member above 15 per cent of the eligible votes. 

6. (a) In determining whether the votes cast by a Governor are to be 
deemed to have raised the total of any member above 15 per cent of the 
eligible votes, the 15 per cent shall be deemed to include, first, the votes 
of the Governor casting the largest number of votes for such member, 
then the votes of the Governor casting the next largest number, and so 
on until 15 per cent is reached. 



23 

(b) If in any ballot two or more Governors having an equal number 
of votes shall have voted for the same nominee and the votes of one or 
more, but not all, of such Governors could be deemed to have raised 
the total votes above 15 per cent of the eligible votes, who shall be en- 
titled to vote on the next ballot shall be determined by lot. 

7. Any Governor, part of whose votes must be counted in order to 
raise the total of any member above 12 per cent, shall be considered 
as casting all of his votes for such member even if the total votes for 
such member thereby exceed 15 per cent. 

8. If, after the second ballot, six members have not been elected, a 
further ballot shall be held on the same principles until six members 
nave been elected, provided that after five members are elected, the 
sixth may be elected by a simple majority of the remaining votes and 
the remaining votes shall be deemed to have counted towards its 
election. 

9. Each member elected to the Executive Board may appoint an 
alternate from among the Members whose votes are deemed to have 
elected it. 

C. Distribution of votes in the Executive Board 

1. In the Executive Board a member elected by a Governor or 
Governors representing a Member or Members in category I shall be 
entitled to cast the votes of that Member or Members. Where the mem- 
ber represents more than one Member it may cast separately the votes 
of the Members it represents. 

2. If the voting rights of a Member of category I should change 
between the times provided for the election of members of the Execu- 
tive Board : 

(a) there shall be no change in such members as a result thereof; 

(b) voting rights of each member of the Executive Board shall 
be adjusted as of the effective date of the change in voting rights 
of the Member or Members it represents; 

(c) the Governor of a new Member of category I may designate 
an existing member of the Executive Board to represent it and 
cast its votes until the next election of members of the Board. 
During such period a member so designated shall be deemed to 
have been elected by the Governor which so designated it. 

D. Amendments 

1. The Governors representing category I Members may by a 
unanimous decision amend the provisions of sub-parts A and B. Unless 
otherwise decided, the amendment shall have immediate effect. The 
President shall be informed of any amendment to sub-parts A and B. 

2. The Governors representing category I Members may amend the 
provisions of sub-part C by a decision taken with a majoritv of 75 
per cent of the total voting power of such Governors. Unless otherwise 
decided, the amendment shall have immediate effect. The President 
shall be informed of any amendment to sub-part C. 

Part IT: Category IT 

A. Distribution of votes in the (7ore?ming Council 

1. 25 per cent of the votes of category IT shall be distributed 
equally among the Members of that category. 



24 

2. The remaining 75 per cent of the votes shall be distributed among 
the Members of category II in the proportion that each Member's 
contribution (made in accordance with Section 5(c) of Article 4) 
bears to the aggregate of the contributions of the category II Members. 

3. In the Governing Council each Governor representing a Member 
in category II shall be entitled to cast the votes of that Member. 

B. Election of members of the Executive Board and their alternates 

1. All of the members and alternate members of the Executive 
Board from category II shall serve for a term of three years, including 
those elected at the first election of members of the Executive Board. 

2. Each nominee for membership of the Executive Board may, in 
consultation with all the other Members of category II, agree with 
another Member in that category that the latter be a nominee as its 
alternate. A vote for the nominee for membership shall also be counted 
as a vote for its alternate. 

3. In balloting for members and alternate members of the Executive 
Board, each Governor shall cast for his nominees all of the votes to 
which the Member which appointed that Governor is entitled. 

4. When on any ballot the number of nominees receiving votes : 

(a) is equal to the number of places to be filled, all such nominees 
shall be considered elected ; 

(b) is fewer than the number of places to be filled, all such 
nominees shall be considered elected, and additional ballots shall 
be held to fill the remaining places; 

(c) exceeds the number of places to be filled, the nominee (or the 
nominees receiving the same number of votes) receiving the fewest 
votes shall be eliminated and, if the remaining nominees having re- 
ceived votes : 

(i) are equal to the number of places to be rilled, all such nomi- 
nees shall be considered elected ; 

(ii) are fewer than the number of places to be filled, all such 
nominees shall be considered elected and additional ballots shall be 
held to fill the remaining places, participation in which shall be 
limited to those Governors whose votes did not count towards the 
election of any member already elected ; 

(iii) exceed the number of places to be rilled, additional ballots 
shall be held, participation in which shall be limited to those Gov- 
ernors whose votes did not count towards the election of any mem- 
bers already elected. 

0. Distribution of votes in the Executive Board 

1. In the Executive Board a member elected by a Governor or Gov- 
ernors representing a Member or Members in category II shall be en- 
titled to cast the votes of that Member or Members. A member of the 
Board representing more than one Member may cast separately the 
votes of the Members it represents. 

2. If the voting rights of a Member of category II should change be- 
tween the times provided for the election of members of the Executive 
Board : 

(a) there shall be no change in such members as a result thereof ; 

(b) the voting rights of a member of the Executive Board shall 
be adjusted as of the effective date of the change in voting rights of 
the Member or Members it represents ; 



25 

(c) the Governor of a new Member of category II may designate 
an existing member of the Executive Board to represent it and cast 
its votes until the next election of members of the Board. During 
such period a member so designated shall be deemed to have been 
elected by the Governor which so designated it. 

D. Amendments 

The provisions in sub-parts A-D may be amended by a vote of the 
Governors representing two thirds of the category II Members whose 
contributions (made in accordance with Section 5(e) of Article 4) 
amount to 70 per cent of the contributions of all category II Members. 
The President shall be informed of any amendments. 

Part III: Category 111 

A. Distribution of votes in the Governing Council 

The 600 votes of category III shall be distributed equally among 
the Members of that category. 

B. Election of members of the Executivt Board and their alternates 

1. Of the six members and six alternate members of the Executive 
Board elected from among Members in category III, two members 
and two alternate members shall be from each of the following re- 
gions: Africa. Asia and Latin America, as these are recognized in the 
practice followed in the United Nations Conference on Trade and 
Development. 

2. The procedures for electing members and alternate members of 
the Executive Board from category III pursuant to Section 5(a) of 
Article (> of the Agreement and. pursuant to Section 5(b) of that 
Article, the term of service of such members and alternate members 
elected at the first election, shall be adopted either before the entry 
into force of the Agreement by a simple majority of the States listed 
in Part I of Schedule I as prospective Members in category III or 
after the entry into force of the Agreement by a simple majority of the 
Members in category III. 

C. Distribution, of votes in the Executivt Hoard 

Each member of the Executive Board from category III shall have 
100 votes. 

D. Amendments 

Sub-part B may be amended from time to time by a two-thirds 
majority of the Members in category III. The President shall be 
informed of any amendments. 



C. THE PEACE CORPS 

(See Volume I for All Material) 



(27) 



D. ARMS CONTROL AND DISARMAMENT 

CONTENTS 

Pnge 

Treaties and Agreements 31 

a. Limited Nuclear Test Ban Treaty 31 

b. Treaty on the Non-Proliferation of Nuclear Weapons 34 

c. Prohibition of Nuclear Weapons in Latin America 40 

(1) Additional Protocol II 40 

(2) Understanding- and Declarations Included in the U.S. 

Instrument of Ratification 42 

(1. Agreement <>n Measures To Reduce the Risk- of Outbreak of 
Nuclear War Between the United State- of America and the 

Union of Soviet Socialist Republics H 

e. Seabed Arms Control Treaty 40 

f. SALT Agreements 50 

(1) Joint Resolution on Interim Agreement (Public Law 

92-448) 50 

(2) Treaty on the Limitation of Anti-Ballistic Missile 

Systems, With Associated Protocol 52 

(3) Interim Agreement on Certain Measures With Respect 

to the Limitation of Strategic Offensive Arms, With 

Associated Protocol 58 

(4) Agreed Interpretations and Unilateral Statements 01 

(5) Standing Consultative Commission on Arms Limi- 

tation OS 

(6) Standing Consultative Commission on Arms Limi- 

tation : Regulations 70 

g. Agreement on the Prevention of Nuclear War 72 

h. Chemical and Biological Warfare 74 

(1) Geneva Protocol of 1925 (with reservation) 74 

(2) Biological W'eapons Convention 70 

i. Antarctic Treatv 81 



(29) 



1. Treaties and Agreements 

a. Limited Nuclear Test Ban Treaty 1 

Treaty Banning Xuclear Weapon Tests in the Atmosphere, in Outer Space and 
Under Water; Done at Moscow, U.S.S.R., on August 5, 1963; Ratification 
advised by the Senate September 24, 1963; Ratified by the President of the 
United States October 7, 1963; Ratifications of the Governments of the United 
States, the United Kingdom of Great Britain and Northern Ireland, and the 
Union of Soviet Socialist Republics deposited with the said Governments at 
Washington, London, and Moscow October 10, 1963; Proclaimed by the Presi- 
dent October 10, 1963; Entered into Force October 10, 1963 

The Governments of the United States of America, the United 
Kingdom of Great Britain and Northern Ireland, and the Union of 
Soviet Socialist Republics, hereinafter referred to as the "Original 
Parties", 

Proclaiming as their principal aim the speediest possible achieve- 
ment of an agreement on general and complete disarmament under 
strict international control in accordance with the objectives of the 
United Nations which would put an end to the armaments race and 
eliminate the incentive to the production and testing of all kinds of 
weapons, including nuclear weapons. 

Seeking to achieve the discontinuance of all test explosions of 
nuclear weapons for all time, determined to continue negotiations to 
this end, and desiring to put an end to the contamination of man's 
environment by radioactive substance?. 
Have agreed as follows : 

ARTICLE i 

1. Each of the Parties to this Treaty undertakes to prohibit, to 
prevent, and not to carry out any nuclear weapon test explosion, or 
any other nuclear explosions nt any place under its jurisdiction or 
control : 

(a) in the atmosphere; beyond its limits, including outer space; 
or underwater, including territorial waters or high seas; or 

Cb) in any other environment if such explosion causes radio- 
active debris to be present outside the territorial limits of the 
State under whose jurisdiction or control such explosion is con- 
ducted. 

It is understood in this connection that the provisions of this sub- 
paragraph are without prejudice to the conclusion of a treaty re- 
sulting in the permanent banning of all nuclear test explosions, 
including all such explosions underground, the conclusion of 
which, as the Parties have stated in the Preamble to this Treaty, 
they seek to achieve. 

* 14 UST 1313 : TIAS ."433: 4SO UNTS 43. For n list of states which are parties to the 
Treaty, see Dept. of State publication. Treaties in Force. 

(31) 



32 

2. Each of the Parties to this Treaty undertakes furthermore to re- 
frain from causing, encouraging, or in any way participating in, the 
carrying out of any nuclear weapon test explosion, or any other nu- 
clear explosion, anywhere which would take place in any of the en- 
vironments described, or have the effect referred to, in paragraph 1 
of this Article. 

ARTICLE II 

1. Any Party may propose amendments to this Treaty. The text 
of any proposed amendment shall be submitted to the Depositary 
Governments which shall circulate it to all Parties to this Treaty. 
Thereafter, if requests to do so by one-third or more of the Parties, 
the Depositary Governments shall convene a conference to which they 
shall invite all the Parties, to consider such amendment. 

2. Any amendment to this Treaty must be approved by a majority 
of the votes of all the Parties to this Treaty, including the votes of all 
of the Original Parties. The amendment shall enter into force for 
all Parties upon the deposit of instruments of ratification by a majority 
of all the Parties, including the instruments of ratification of all of 
the Original Parties. 

article ni 

1. This Treaty shall be open to all States for signature. Any State 
which does not sign this Treaty before its entry into force in accord- 
ance with paragraph 3 of this Article may accede to it at any time. 

2. This Treaty shall be subject to ratification by signatory States. 
Instruments of ratification and instruments of accession shall be de- 
posited with the Governments of the Original Parties — the United 
States of America, the United Kingdom of Great Britain and Northern 
Ireland, and the Union of Soviet Socialist Republics — which are 
hereby designated the Depositary Governments. 

3. This Treaty shall enter into force after its ratification by all the 
Original Parties and the deposit of their instruments of ratification. 

4. For States whose instruments of ratification or accession are 
deposited subsequent to the entry into force of this Treaty, it shall 
enter into force on the date of the deposit of their instruments of 
ratification or accession. 

5. The Depositary Governments shall promptly inform all signa- 
tory and acceding States of the date of each signature, the date of 
deposit of each instrument of ratification of and accession to this 
Treaty, the date of its entry into force, and the date of receipt of any 
requests for conferences or other notices. 

6. This Treaty shall be registered by the Depositary Governments 
pursuant to Article 102 of the Charter of the United Nations. 

ARTICLE IV 

This Treaty shall be of unlimited duration. 
< Each Party shall in exercising its national sovereignty have the 
right to withdraw from the Treaty if it decides that extraordinary 
events, related to the subject matter of this Treaty, have jeopardized 
the supreme interests of its countrv. It shall give notice of such 
withdrawal to all other Parties to the Treaty three months in advance. 



33 



ARTICLE V 



This Treaty, of which the English and Russian texts are equally 
authentic, shall be deposited in the archives of the Depositary Gov- 
ernments. Duly certified copies of this Treaty shall be transmitted 
by the Depositary Governments to the Governments of the signatory 
and acceding States. 

In witness whereof the undersigned, duly authorized, have signed 
this Treaty. 

Done in triplicate at the city of Moscow the fifth day of August, 
one thousand nine hundred and sixty-three. 



Note. — See also Article IV of the Treaty on Outer Space, page 

soT. 



b. Treaty on the Non-Proliferation of Nuclear Weapons 3 

Done at Washington, London, and Moscow July 1, 1968; Ratification advised by 
the Senate of the United States of America March 13, 1969; Ratified by the 
President of the United States of America November 24, 1969; Ratification of 
the United States of America deposited at Washington, London, and Moscow 
March 5, 1970; Proclaimed by the President of the United States of America 
March 5, 1970 ; Entered into force March 5, 1970 

The States concluding this Treaty, hereinafter referred to as the 
"Parties to the Treaty", 

Considering the devastation that would be visited upon all man- 
kind by a nuclear war and the consequent need to make every effort 
to avert the danger of such a war and to take measures to safeguard 
the security of peoples, 

Believing that the proliferation of nuclear weapons would seriously 
enhance the danger of nuclear war, 

The conformity with resolutons of the United Nations General As- 
sembly calling for the conclusion of an agreement on the prevention 
of wider dissemination of nuclear weapons, 

Undertaking to cooperate in facilitating the application of Inter- 
national Atomic Energy Agency safeguards on peaceful nuclear 
activities, 

Expressing their support for research, development and other 
efforts to further the application, within the framework of the Inter- 
national Atomic Energy Agency safeguards system, of the principle 
of safeguarding effectively the flow of source and special fissionable 
materials by use of instruments and other techniques at certain stra- 
tegic points. 

Affirming the principle that the benefits of peaceful applications of 
nuclear technology, including any technological by-products which 
may be derived by nuclear-weapon States from the development of 
nuclear explosive devices, should be available for peaceful purposes to 
all Parties to the Treaty, whether nuclear-weapon or non-nuclear- 
weapon States, 

Convinced that, in furtherance of this principle, all Parties to the 
Treaty are entitled to participate in the fullest possible exchange of 
scientific information for, and to contribute alone or in cooperation 
with other States to, the further development of the applications of 
atomic energy for peaceful purposes, 

Declaring their intention to achieve at the earliest possible date the 
cessation of the nuclear arms race and to undertake effective measures 
in the direction of nuclear disarmament, 

Urging the cooperation of all States in the attainment of this 
objective, 

1 21 UST 483 : TIAS 6839. For a list of states which are parties to the Treaty, see Dept. 
of State publication, Treaties in Force. 

(34) 



35 

Recalling the determination expressed by the Parties to the 1963 
Treaty Banning Nuclear Weapon Tests in the Atmosphere in Outer 
Space and Under Water 2 in its Preamble to seek to achieve the discon- 
tinuance of all test explosions of nuclear weapons for all time and to 
continue negotiations to this end, 

Desiring to further the easing of international tension and the 
strengthening of trust between States in order to facilitate the ces- 
sation of the manufacture of nuclear weapons, the liquidation of all 
their existing stockpiles, and the elimination from national arsenals of 
nuclear weapons and the means of their delivery pursuant to a treaty 
on general and complete disarmament under strict and effective inter- 
national control, 

Recalling that, in accordance with the Charter of the United Na- 
tions, 3 States must refrain in their international relations from the 
threat or use of force against the territorial integrity or political in- 
dependence of any State, or in any other manner inconsistent with the 
Purposes of the United Nations, and that the establishment and main- 
tenance of international peace and security are to be promoted with 
the least diversion for armaments of the world's human and economic 
resources, 

Have agreed as follows: 

ARTICLE I 

Each nuclear- weapon State Party to the Treaty undertakes not to 
transfer to any recipient whatsoever nuclear weapons or other nuclear 
explosive devices or control over such weapons or explosive devices di- 
rectly, or indirectly ; and not in any way to assist, encourage, or induce 
any non-nuclear-weapon State to manufacture or otherwise acquire 
nuclear weapons or other nuclear explosive devices, or control over 
such weapons or explosive devices. 

ARTICLE II 

Each non-nuclear- weapon State Party to the Treaty undertakes not 
to receive the transfer from any transferor whatsoever of nuclear 
weapons or other nuclear explosive devices or of control over such 
weapons or explosive devices directly, or indirectly ; not to manufac- 
ture or otherwise acquire nuclear weapons or other nuclear explosive 
devices ; and not to seek or receive any assistance in the manufacture of 
nuclear weapons or other nuclear explosive devices. 

article ni 

1. Each non-nuclear-weapon State Party to the Treaty undertaken 
to accept safeguards, as set forth in an agreement to be negotiated and 
concluded with the International Atomic Energy Agency in the 
cordance with the Statute of the International Atomic Energy Agency 
and the Agency's safeguards system, for the exclusive purpose of veri- 
fication of the fulfillment of its obligations assumed under this Treaty 
with a view to preventing diversion of nuclear energy from peaceful 
uses to nuclear weapons or other nuclear explosive devices. Procedures 



2 See page 31 of text. 
: See page 583 of text. 



36 

for the safeguards required by this article shall be followed with re- 
spect to source or special fissionable material whether it is being pro- 
duced, processed or used in any principal nuclear facility or is outside 
any such facility. The safeguards required by this article shall be ap- 
plied on all source or special fissionable material in all peaceful nu- 
clear activities within the territory of such State, under its jurisdic- 
tion, or carried out under its control anywhere. 

2. Each State Party to the Treaty undertakes not to provide: (a) 
source or special fissionable material, or (b) equipment or material 
especially designed or prepared for the processing, use or production 
of special fissionable material, to any non-nuclear- weapon State for 

Ceacef ul purposes, unless the source or special fissionable material shall 
e subject to the safeguards required by this article. 

3. The safeguards required by this article shall be implemented in 
a manner designed to comply with article IV of this Treaty, and to 
avoid hampering the economic or technological development of the 
Parties or international cooperation in the field of peaceful nuclear 
activities, including the international exchange of nuclear material 
and equipment for the processing, use or production of nuclear ma- 
terial for peaceful purposes in accordance with the provisions of this 
article ana the principle of safeguarding set forth in the Preamble of 
the Treaty. 

4. Non-nuclear-weapon States Party to the Treaty shall conclude 
agreements with the International Atomic Energy Agency to meet 
the requirements of this article either individually or together with 
other States in accordance with the Statute of the International 
Atomic Energy Agency. Negotiation of such agreements shall com- 
mence within 180 days from the original entry into force of this Treaty. 
For States depositing their instruments of ratification or accession 
after the 180-day period, negotiation of such agreements shall com- 
mence not later than the date of such deposit. Such agreements shall 
enter into force not later than eighteen months after the date of 
initiation of negotiations. 

ARTICLE IV 

1. Nothing in this Treaty shall be interpreted as affecting the in- 
alienable right of all the Parties to the Treaty to develop research, 
production and use of nuclear energy for peaceful purposes without 
discrimination and in conformity with articles I and II of this Treaty. 

2. All the Parties to the Treaty undertake to facilitate, and have the 
right to participate in, the fullest possible exchange of equipment, ma- 
terials and scientific and technological information for the peaceful 
uses of nuclear energy. Parties to the Treaty in a position to do so shall 
also cooperate in contributing alone or together with other States or 
international organizations to the further development of the applica- 
tions of nuclear energy for peaceful purposes, especially in the terri- 
tories of non-nuclear-weapon States Party to the Treaty, with due 
consideration for the needs of the developing areas of the world. 

article v 

Each Party to the Treaty undertakes to take appropriate measures 
to ensure that, in accordance with this Treaty, under appropriate 



37 

international observation and through appropriate international pro- 
cedures, potential benefits from any peaceful applications of nuclear 
explosions will be made available to non-nuclear- weapon States Party 
to the Treaty on a non-discriminatory basis and that the charge to 
such Parties for the explosive devices used will be as low as possible 
and exclude any charge for research and development. Non-nuclear- 
weapon States Party to the Treaty shall be able to obtain such bene- 
fits, pursuant to a special international agreement or agreements, 
through an appropriate international body with adequate representa- 
tion of non-nuclear-weapon States. Negotiations of this subject shall 
commence as soon as possible after the Treaty enters into force. Non- 
nuclear- weapon States Party to the Treaty so desiring may also obtain 
such benefits pursuant to bilateral agreements. 

ARTICLE VI 

Each of the Parties to the Treaty undertakes to pursue negotiations 
in good faith on effective measures relating to cessation of the nuclear 
arms race at an early date and to nuclear disarmament, and on a treaty 
on general and complete disarmament under strict and effective inter- 
national control. 

ARTICI.E VII 

Nothing in this Treaty affects the right of any group of States to 
conclude regional treaties in order to assure the total absence of nuclear 
weapons in their respective territories. 

article vm 

1. Any Party to the Treaty may propose amendments to this Treaty. 
The text of any proposed amendment shall be submitted to the 
Depositary Governments which shall circulate it to all Parties to the 
Treaty. Thereupon, if requested to do so by one-third or more of 
the Parties to the Treaty, the Depositary Governments shall convene 
a conference, to which they shall invite all the Parties to the Treaty, to 
consider such an amendment. 

2. Any amendment to this Treaty must be approved by a majority 
of the votes of all the Parties to the Treaty, including the votes of all 
nuclear- weapon States Party to the Treaty and all other Parties which, 
on the date the amendment is circulated, are members of the Board of 
Governors of the International Atomic Energy Agency. The amend- 
ment shall enter into force for each Party that deposits its instrument 
of ratification of the amendment upon the deposit of such instruments 
of ratification by a majority of all the Parties, including the instru- 
ments of ratification of all nuclear- weapon States Party to the Treaty 
and all other Parties which, on the date the amendment is circulated, 
are members of the Board of Governors of the International Atomic 
Energy Agency. Thereafter, it shall enter into force for any other 
Party upon the deposit of its instrument of ratification of the amend- 
ment. 

3. Five years after the entry into force of this Treaty, a conference 
of Parties to the Treaty shall be held in Geneva, Switzerland, in order 
to review the operation of this Treaty with a view to assuring that the 



38 

purposes of the Preamble and the provisions of the Treaty are being 
realized. At intervals of five years thereafter, a majority of the Parties 
to the Treaty may obtain, by submitting a proposal to this effect to the 
Depositary Governments, the convening of further conferences with 
the same objective of reviewing the operation of the Treaty. 

ARTICLE IX 

1. This Treaty shall be open to all States for signature. Any State 
which does not sign the Treaty before its entry into force in accordance 
with paragraph 3 of this article may accede to it at any time. 

2. This Treaty shall be subject to ratification by signatory States. 
Instruments of ratification and instruments of accession shall be de- 
posited with the Governments of the United States of America, the 
United Kingdom of Great Britain and Northern Ireland and the 
Union of Soviet Socialist Republics, which are hereby designated the 
Depositary Governments. 

3. This Treaty shall enter into force after its ratification by the 
States, the Governments of which are designated Depositaries of the 
Treaty, and forty other States signatory to this Treaty and the deposit 
of their instruments of ratification. For the purposes of this Treaty, a 
nuclear- weapon State is one which has manufactured and exploded a 
nuclear weapon or other nuclear explosive device prior to January 1, 
1967. 

4. For States whose instruments of ratification or accession are 
deposited subsequent to the entry into force of this Treaty, it shall 
enter into force on the date of the deposit of their instruments of 
ratification or accession. 

5. The Depositary Governments shall promptly inform all signatory 
and acceding States of the date of each signature, the date of deposit 
of each instrument of ratification or of accession, the date of the 
entry into force of this Treaty, and the date of receipt of any requests 
for convening a conference or other notices. 

6. This Treaty shall be registered by the Depositary Governments 
pursuant to article 102 of the Charter of the United Nations. 4 

ARTICLE X 

^ 1. Each Party shall in exercising its national sovereignty have the 
right to withdraw from the Treaty if it decides that extraordinary 
events, related to the subject matter of this Treaty, have jeopardized 
the supreme interests of its country. It shall give notice of such with- 
drawal to all other Parties to the Treaty and to the United Nations 
Security Council three months in advance. Such notice shall include 
a statement of the extraordinary events it regards as having jeopard- 
ized its supreme interests. 

2. Twenty-five years after the entry into force of the Treaty, a con- 
ference shall be convened to decide whether the Treaty shall continue 
in force indefinitely, or shall be extended for an additional fixed period 
or periods. This decision shall be taken by a majority of the Parties 
of the Treaty. 

4 See page 604 of text. 



39 



ARTICLE XI 



This Treaty, the English, Russian, French, Spanish and Chinese 
texts of which are equally authentic, shall be deposited in the archives 
of the Depositary Governments. Duly certified copies of this Treaty 
shall be transmitted by the Depositary Governments to the Govern- 
ments of the signatory and acceding States. 

In witness whereof the undersigned, duly authorized, have signed 
this Treaty. 

Done in triplicate, at the cities of Washington London and Moscow, 
the first day of July one thousand nine hundred sixty-eight. 



c. Prohibition of Nuclear Weapons in Latin America 

(1) Additional Protocol II 1 

Done at Mexico February 14, 1967; Ratification advised by the Senate of the 
United States of America, with understandings and declarations, April 19, 
1971 ; Ratified by the President of the United States of America, with said 
understandings and declarations, May 8, 1971; Ratification of the United 
States of America deposited at Mexico, with said understandings and declara- 
tions, May 12, 1971; Proclaimed by the President of the United States of 
America June 11, 1971; Entered into force with respect to the United States 
of America May 12, 1971 

The undersigned Plenipotentiaries, furnished with full powers by 
their respective Governments, 

Convinced, That the Treaty for the Prohibition of Nuclear Weapons 
in Latin America, negotiated and signed in accordance with the recom- 
mendations of the General Assembly of the United Nations in Resolu- 
tion 1911 (XVIII) of 27 November'1963, represents an important step 
towards ensuring the non-proliferation of nuclear weapons, 

Aware, That the non-proliferation of nuclear weapons is not an end 
in itself out, rather, a means of achieving general and complete dis- 
armament at a later stage, and 

Desiring, To contribute, so far as lies in their power, towards end- 
ing the armaments race, especially in the field of nuclear weapons, 
and towards promoting and strengthening a world at peace, based on 
mutual respect and sovereign equality of States, 

Have agreed as follows : 

Article 1. The statute of denuclearization of Latin America in re- 
spect of warlike purposes, as defined, delimited and set forth in the 
Treaty for the Prohibition of Nuclear Weapons in Latin America of 
which this instrument is an annex, shall be fully respected by the 
Parties to this Protocol in all its express aims and provisions. 

Article 2. The Governments represented by the undersigned Plen- 
ipotentiaries undertake, therefore not to contribute in any way to the 
performance of acts involving a violation of the obligations of article 
1 of the Treaty in the territories to which the Treaty applies in ac- 
cordance with article 4 thereof. 

Article 3. The Governments represented by the undersigned Plen- 
ipotentiaries also undertake not to use or threaten to use nuclear weap- 
ons against the Contracting Parties of the Treaty for the Prohibition 
of Nuclear Weapons in Latin America. 

Article 4. The duration of this Protocol shall be the same as that 
of the Treaty for the Prohibition of Nuclear Weapons in Latin 

122 UST 754: TIAS 7137: 634 UNTS 364: The United States Is not n party to the 
Treaty for the Prohibition of Nuclear WeaponR In Latin America with Additional Protocol 
I. The United States signed Additional Protocol I on May 26. 1977, but it has not yet been 
transmitted for the advice and consent of the Senate. Should Protocol I enter into force 
for the United States prior to the publication of a new volume III. the text will be inserted 
in the last section of the annual publication of volume II. The U.S. has ratified Additional 
Protocol II. France, the People's Republic of China and the United Kingdom are the other 
parties to Protocol II. 

(40) 



41 

America of which this Protocol is an annex, and the definitions of 
territory and nuclear weapons set forth in articles 3 and 5 of the 
Treaty shall be applicable to this Protocol, as well as the provisions 
regarding ratification, reservations, denunciation, authentic texts and 
registration contained in articles 26, 27, 30 and 31 of the Treaty. 

Article 5. This Protocol shall enter into force, for the States which 
have ratified it, on the date of the deposit of their respective instru- 
ments of ratification. 

In witness whereof, the undersigned Plenipotentiaries, having de- 
posited their full powers, found to be in good and due form, sign 
this Additional Protocol on behalf of their respective Governments. 



(2) Understandings and Declarations Included in the U.S. 
Instrument of Ratification 1 

I 

That the United States Government understands the reference in 
Article 3 of the treaty to "its own legislation" to relate only to such 
legislation as is compatible with the rules of international law and as 
involves an exercise of sovereignty consistent with those rules, and 
accordingly that ratification of Additional Protocol II by the United 
States Government could not be regarded as implying recognition, 
for the purposes of this treaty and its protocols or for any other pur- 
pose, of any legislation which did not, in the view of the United States, 
comply with the relevant rules of international law. 

That the United States Government takes note of the Preparatory 
Commission's interpretation of the treaty, as set forth in the Final 
Act, that, governed by the principles and rules of international law, 
each of the Contracting Parties retains exclusive power and legal 
competence, unaffected by the terms of the treaty, to grant or deny 
non-Contracting Parties transit and transport privileges. 

That as regards the undertaking in Article 3 of Protocol II not to 
use or threaten to u c e nuclear weapons against the Contracting Parties, 
the United States Government would have to consider that an armed 
attack by a Contracting Party, in which it was assisted by a nuclear- 
weapon state, would be incompatible with the Contracting Party's 
corresponding obligations under Article I of the treaty. 

II 

That the United States Government considers that the technology 
of making nuclear explosive devices for peaceful purposes is indistin- 
guishable from the technology of making nuclear weapons, and that 
nuclear weapons and nuclear explosive devices for peaceful purposes 
are both capable of releasing nuclear energy in an uncontrolled man- 
ner and have the common group of characteristics of large amounts of 
energy generated instantaneously from a compact source. Therefore 
the United States Government understands the definition contained 
in Article 5 of the treaty as necessarily encompassing all nuclear explo- 
sive devices. It is also understood that Articles 1 and 5 restrict accord- 
ingly the activities of the Contracting Parties under paragraph 1 of 
Article 18. 

That the United States Government understands that paragraph 4 
of Article 18 of the treaty permits, and that United States adherence 
to Protocol II will not prevent, collaboration by the United States 
vrith Contracting Parties for the purpose of carrying out explosions 
of nuclear devices for peaceful purposes in a manner consistent with 

1 22 UST 760. 

(42) 



43 

a policy of not contributing to the proliferation of nuclear weapons 
capabilities. In this connection, the United States Government notes 
Article V of the Treaty on the Non-Proliferation of Nuclear Weapons, 
under which it joined in an undertaking to take appropriate measures 
to ensure that potential benefits of peaceful applications of nuclear 
explosions would be made available to non-nuclear-weapon states 
party to that treaty, and reaffirms its willingness to extend such under- 
taking, on the same basis, to states precluded by the present treaty 
from manufacturing or acquiring any nuclear explosive device. 

Ill 

That the United States Government also declares that, although 
not required by Protocol II, it will act with respect to such territories 
of Protocol I adherents as are within the geographical area defined 
in paragraph 2 of Article 4 of the treaty in the same manner as 
Protocol II requires it to act with respect to the territories of Con- 
tracting Parties. 

The President ratified Additional Protocol II on May 8, 1971, with 
the above-recited understandings and declaration-, in pursuance of 
the advice and consent of the Senate. 

It is provided in Article 5 of Additional Protocol II that the 
Protocol shall enter into force, for the States which have ratified it, 
on the date of the deposit of their respective instruments of 
ratification. 

The instrument of ratification of the United Kingdom of Great 
Britain and Northern Ireland was deposited on December 11. 1969 
with understandings and a declaration, and the instrument of rati- 
fication of the United States of America was deposited on May 12, 
1971 with the above-recited understandings and declarations. 

In accordance with Article 5 of Additional Protocol II, the 
Protocol entered into force for the United States of America on 
May 12, 1971, subject to the above-recited understandings and 
declarations. 



d. Agreement on Measures To Reduce the Risk of Outbreak of 
Nuclear War Between the United States of America and the 
Union of Soviet Socialist Republics ' 

Signed at Washington September 30, 1971; Entered into force September 30, 1971 

The United States of America and the Union of Soviet Socialist 
Republics, hereinafter referred to as the Parties : 

Taking into account the devastating consequences that nuclear war 
would have for all mankind, and recognizing the need to exert every 
effort to avert the risk of outbreak of such a war, including measures 
to guard against accidental or unauthorized use of nuclear weapons, 

Believing that agreement on measures for reducing the risk of out- 
break of nuclear war serves the interests of strengthening international 
peace and security, and is in no way contrary to the interests of any 
other country, 

Bearing in mind that continued efforts are also needed in the future 
to seek ways of reducing the risk of outbreak of nuclear war, 

Have agreed as follows : 

Article 1 

Each Party undertakes to maintain and to improve, as it deems nec- 
essary, its existing organizational and technical arrangements to guard 
against the accidental or unauthorized use of nuclear weapons under 
its control. 

Article 2 

The Parties undertake to notify each other immediately in the event 
of an accidental, unauthorized or any other unexplained incident in- 
volving a possible detonation of a nuclear weapon which could create 
a risk of outbreak of nuclear war. In the event of such an incident, 
the Party whose nuclear weapon is involved will immediately make 
every effort to take necessary measures to render harmless or destroy 
such weapon without its causing damage. 

Article 3 

The Parties undertake to notify each other immediately in the event 
of detection by missile warning systems of unidentified objects, or in 
the event of signs of interference with these systems or with related 
communications facilities, if such occurrences could create a risk of 
outbreak of nuclear war between the two countries. 

Article 4 

Each Party undertakes to notify the other Party in advance of any 
planned missile launches if such launches will extend beyond its na- 
tional territory in the direction of the other Party. 



22 UST 1590: TIAS 718«. 

(44) 



45 
Article 5 

Each Party, in other situations involving unexplained nuclear in- 
cidents, undertakes to act in such a manner as to reduce the possibility 
of its actions being misinterpreted by the other Party. In any such 
situation, each Party may inform the other Party or request informa- 
tion when, in its view, this is warranted by the interests of averting the 
risk of outbreak of nuclear war. 

Article G 

For transmission of urgent information, notifications and requests 
for information in situations requiring prompt clarification, the Par- 
ties shall make primary use of the Direct Communications Link be- 
tween the Governments of the United States of America and the Union 
of Soviet Socialist Republics. 

For transmission of other information, notifications and requests 
for information, the Parties, at their own discretion, may use any 
communications facilities, including diplomatic channels, depending 
on the degree of urgency. 

Article 7 

The Parties undertake to hold consultations, as mutually agreed, to 
consider questions relating to implementation of the provisions of this 
Agreement, as well as to discuss possible amendments thereto aimed 
at further implementation of the purposes of this Agreement. 

Article 8 

This Agreement shall be of unlimited duration. 

Article 9 

This Agreement shall enter into force upon signature. 

Done at Washington on September 30, 1971, in two copies, each 
in the English and Russian languages, both texts being equally 
authentic. 



e. Seabed Arms Control Treaty * 

Done at Washington, London and Moscow February 11, 1971; Ratification ad- 
vised by the Senate of the United States of America February 15, 1972 ; Rati- 
fied by the President of the United States of America April 26, 1972; Ratifi- 
cation of the United States of America deposited at Washington, London and 
Moscow May 18, 1972; Entered into force May 18, 1972 

The States Parties to this Treaty, 

Recognizing the common interest of mankind in the progress of the 
exploration and use of the seabed and the ocean floor for peaceful 
purposes, 

Considering that the prevention of a nuclear arms race on the seabed 
and the ocean floor serves the interests of maintaining world peace, 
reduces international tensions and strengthens friendly relations 
among States, 

Convinced that this Treaty constitutes a step towards the exclusion 
of the seabed, the ocean floor and the subsoil thereof from the arms 
race, 

Convinced that this Treaty constitutes a step towards a treaty on 
general and complete disarmament under strict and effective inter- 
national control, and determined to continue negotiations to this end, 

Convinced that this Treaty will further the purposes and principles 
of the Charter of the United Nations, in a manner consistent with the 
principles of international law and without infringing the freedoms of 
the high seas, 

Have agreed as follows : 

Article I 

1. The States Parties to this Treaty undertake not to emplant or 
emplace on the seabed and the ocean floor and in the subsoil thereof 
beyond the outer limit of a seabed zone, as defined in article II, any 
nuclear weapons or any other types of weapons of mass destruction as 
well as structures, launching installations or any other facilities spe- 
cifically designed for storing, testing or using such weapons. 

2. The undertakings of paragraph 1 of this article shall also apply 
to the seabed zone referred to in the same paragraph, except that 
within such seabed zone, they shall not apply either to the coastal State 
or to the seabed beneath its territorial waters. 

3. The States Parties to this Treaty undertake not to assist, encour- 
age or induce any State to carry out activities referred to in paragraph 
1 of this article and not to participate in any other way in such actions. 

Article II 

For the purpose of this Treaty, the outer limit of the seabed zone 
referred to in article I shall be coterminous with the twelve-mile outer 



1 23 UST 701 : TIAS 7337. For a list of states which are parties to the Treaty, see Dept. 
of State publication, Treaties in Force. 

(46) 



47 

limit of the zone referred to in part II of the Convention on the Terri- 
torial Sea and the Contiguous Zone, signed at Geneva on April 29, 
1958, and shall be measured in accordance with the provisions of part 
I, section II, of that Convention and in accordance with international 
law. 

Article III 

1. In order to promote the objectives of and insure compliance with 
the provisions of this Treaty, each State Party to the Treaty shall 
have the right to verify through observation the activities of other 
States Parties to the Treaty on the seabed and the ocean floor and in 
the subsoil thereof beyond the zone referred to in article I, provided 
that observation does not interfere with such activities. 

2. If after such observation reasonable doubts remain concerning 
the fulfillment of the obligations assumed under the Treaty, the State 
Party having such doubts and the State Party that is responsible for 
the activities giving rise to the doubts shall consult with a view to re- 
moving the doubts. If the doubts persist, the State Party having such 
doubts shall notify the other States Parties, and the Parties concerned 
shall cooperate on such further procedures for verification as may be 
agreed, including appropriate inspection of objects, structures, instal- 
lations or other facilities that reasonably may be expected to be of a 
kind described in article I. The Parties in the region of the activities, 
including any coastal State, and any other Party so requesting, shall 
be entitled to participate in such consultation and cooperation. After 
completion of the further procedures for verification, an appropriate 
report shall be circulated to other Parties by the Party that initiated 
such procedures. 

3. If the State responsible for the activities giving rise to the 
reasonable doubts is not identifiable by observation of the object, 
structure, installation or other facility, the State Party having such 
doubts shall notify and make appropriate inquiries of States Parties 
in the region of the activities and of any other State Party. If it is 
ascertained through these inquiries that a particular State Party is 
responsible for the activities, that State Party shall consult and 
cooperate with other Parties as provided in paragraph 2 of this article. 
If the identity of the State responsible for the activities cannot be 
ascertained through these inquiries, then further verification pro- 
cedures, including inspection, may be undertaken by the inquiring 
State Party, which shall invite the participation of the Parties in 
the region of the activities, including any coastal State, and of any 
other Party desiring to cooperate. 

4. If consultation and cooperation pursuant to paragraphs 2 and 3 
of this article have not removed the doubts concerning the activities 
and there remains a serious question concerning fulfillment of the 
obligations assumed under this Treaty, a State Party may, in accord- 
ance with the provisions of the Charter of the United Nations, refer 
the matter to the Security Council, which may take action in ac- 
cordance with the Charter. 

5. Verification pursuant to this article may be undertaken by any 
State Party using its own means, or with the full or partial assistance 
of any other State Party, or through appropriate international pro- 
cedures within the framework of the United Nations and in accord- 
ance with its Charter. 



48 

6. Verification activities pursuant to this Treaty shall not interfere 
with activities of other States Parties and shall be conducted with 
due regard for rights recognized under international law, including 
the freedoms of the high seas and the rights of coastal States with 
respect to the exploration and exploitation of their continental shelves. 

Article IV 

Nothing in this Treaty shall be interpreted as supporting or preju- 
dicing the position of any State Party with respect to existing inter- 
national conventions, including the 1958 Convention on the Territorial 
Sea and the Contiguous Zone, or with respect to rights or claims which 
such State Party may assert, or with respect to recognition or non- 
recognition of rights or claims asserted by any other State, related to 
waters off its coasts, including, inter alia, territorial seas and contigu- 
ous zones, or to the seabed and the ocean floor, including continental 
shelves. 

Article V 

The Parties to this Treaty undertake to continue negotiations in 
good faith concerning further measures in the field of disarmament 
for the prevention of an arms race on the seabed, the ocean floor and 
the subsoil thereof. 

Article VI 

Any State Party may propose amendments to this Treaty. Amend- 
ments shall enter into force for each State Party accepting the amend- 
ments upon their acceptance by a majority of the States Parties to 
the Treaty and, thereafter, for each remaining State Party on the date 

of acceptance by it. 

Article VII 

Five years after the entry into force of this Treaty, a conference 
of Parties to the Treaty shall be held at Geneva, Switzerland, in order 
to review the operation of this Treaty with a view to assuring that the 
purposes of the preamble and the provisions of the Treaty are being 
realized. Such review shall take into account any relevant technologi- 
cal developments. The review conference shall determine, in accord- 
ance with the views of a majority of those Parties attending, whether 
and when an additional review conference shall be convened. 

Article VTII 

Each State Party to this Treaty shall in exercising its national 
sovereignty have the right to withdraw from this Treaty if it decides 
that extraordinary events related to the subject matter of this Treaty 
have jeopardized the supreme interests of its country. It shall give 
notice of such withdrawal to all other States Parties to the Treaty and 
to the United Nations Security Council three months in advance. 
Such notice shall include a statement of the extraordinary events it 
considers to have jeopardized its supreme interests. 



49 
Article IX 

The provisions of this Treaty shall in no way affect the obligations 
assumed by States Parties to the Treaty under international instru- 
ments establishing zones free from nuclear weapons. 

Article X 

1. This Treaty shall be open for signature to all States. Any State 
which does not sign the Treaty before its entry into force in accordance 
with paragraph 3 of this article may accede to it at any time. 

2. This Treaty shall be subject to ratification by signatory States. 
Instruments of ratification and of accession shall be deposited with 
the Governments of the United States of America, the United King- 
dom of Great Britain and Northern Ireland, and the Union of Soviet 
Socialist Republics, which are hereby designated the Depository 
Governments. 

3. This Treaty shall enter into force after the deposit of instruments 
of ratification by twenty-two Governments, including the Govern- 
ments designated as Depositary Governments of this Treaty. 

4. For States whose instruments of ratification or accession are 
deposited after the entry into force of this Treaty, it shall enter into 
force on the date of the deposit of their instruments of ratification or 
accession. 

5. The Depositary Governments shall promptly inform the Govern- 
ments of all signatory and acceding States of the date of each signa- 
ture, of the date of deposit of each instrument of ratification or of ac- 
cession, of the date of the entry into force of this Treaty, and of the 
receipt of other notices. 

6. This Treaty shall be registered by the Depositary Governments 
pursuant to Article 102 of the Charter of the United Nations.* 

Article XI 

This Treaty, the English, Russian, French, Spanish and Chinese 
texts of which are equally authentic, shall be deposited in the archives 
of the Depositary Governments. Duly certified copies of this Treaty 
shall be transmitted by the Depositary Governments to the Govern- 
ments of the States signatory and acceding thereto. 

In witness whereof the undersigned, Deing duly authorized there- 
to, have signed this Treaty. 

Done in triplicate, at the cities of Washington, London and Mos- 
cow, this eleventh day of February, one thousand nine hundred 
seventy-one. 

2 See page 604 of text. 



f. SALT Agreements 

(1) Joint Resolution on Interim Agreement 1 

Public Law 92-448 [H.J. Res. 1227], 86 Stat. 746, approved September 30, 1972 

Resolved by the Senate and House of Representatives of the United 
States of America in Congress assembled. That the Congress hereby 
endorses those portions of the Declaration of Basic Principles of 
Mutual Relations Between the United States of America and the 
Union of Soviet Socialist Republics signed by President Nixon and 
General Secretary Brezhnev at Moscow on May 29, 1972, which relate 
to the dangers of military confrontation and which read as follows: 

"The United States of America and the Union of Soviet Socialist 
Republics attach major importance to preventing the development of 
situations capable of causing a dangerous exacerbation of their rela- 
tions . . ." and "will do their utmost to avoid military confrontations 
and to prevent the outbreak of nuclear war" and "will always exercise 
restraint in their mutual relations," and "on outstanding issues will 
conduct" their discussions and negotiations "in a spirit of reciprocity, 
mutual accommodation and mutual benefit," and 

"Both sides recognize that efforts to obtain unilateral advantage at 
the expense of the other, directly or indirectly, are inconsistent with 
these objectives," and 

"The prerequisites for maintaining and strengthening peaceful re- 
lations between the United States of America and the Union of Soviet 
Socialist Republics are the recognition of the security interests of 
the parties based on the principle of equality and the renunciation of 
the use or threat of force." 

Sec. 2. The President is hereby authorized to approve on behalf 
of the United States the interim agreement between the United States 
of America and the Union of Soviet Socialist Republics on certain 
measures with respect to the limitation of strategic offensive arms, 
and the protocol related thereto, signed at Moscow on May 26, 1972, 
by Richard Nixon, President of the United States of America and 
Leonid I. Brezhnev, General Secretary of the Central Committee of 
the Communist Party of the Soviet Union. 

Sec. 3. The Government and the people of the United States ar- 
dently desire a stable international strategic balance that maintains 
peace and deters aggression. The Congress supports the stated policy 
of the United States that, were a more complete strategic offensive 
arms agreement not achieved within the five years of the interim 
agreement, and were the survivability of the strategic deterrent forces 
of the United States to be threatened as a result of such failure, this 



1 The Interim Agreement expired on Oetober 3. 1077. However, both the United States 
and the Soviet Union issued parallel statements announcing that they would continue 
to observe the limitations on strategic buildups which were contained in the Interim 
Agreement. 

(50) 



51 

could jeopardize the supreme national interests of the United States; 
the Congress recognizes the difficulty of maintaining a stable strategic 
balance in a period of rapidly developing technology; the Congress 
recognizes the principle of United States-Soviet Union equality 
reflected in the antiballistic missile treaty, and urges and requests the 
President to seek a future treaty that, inter alia, would not limit the 
United States to levels of intercontinental strategic forces inferior to 
the limits provided for the Soviet Union : and the Congress considers 
that the success of these agreements and the attainment of more perma- 
nent and comprehensive agreements are dependent upon the mainte- 
nance under present world conditions of a vigorous research and 
development and modernization program as required by a prudent 
strategic posture. 

Sec. 4. The Congress hereby commends the President for having 
successfully concluded agreements with the Soviet Union limiting the 
production and deployment of antiballistic missiles and certain stra- 
tegic offensive armaments, and it supports the announced intention 
of the President to seek further limits on the production and deploy- 
ment of strategic armaments at future Strategic Arms Limitation 
Talks. At the same time, the Senate takes cognizance of the fact 
that agreements to limit the further escalation of the arms race are 
only preliminary steps, however important, toward the attainment of 
world stability and national security. The Congress therefore urges 
the President to seek at the earliest practicable moment Strategic 
Arms Reduction Talks (SART) with the Soviet Union, the People's 
Republic of China, and other countries, and simultaneously to work 
toward reductions in conventional armaments, in order to bring about 
agreements for mutual decreases in the production and development 
of weapons of mass destruction so as to eliminate the threat of large- 
scale devastation and the ever-mounting costs of arms production and 
weapons modernization, thereby freeing world resources for construc- 
tive, peaceful use. 

Sec. 5. Pursuant to paragraph six of the Declaration of Principles 
of Nixon and Brezhnev on May 29, 1972. which states that the United 
States and the Union of Soviet Socialist Republics: ''will continue to 
make special efforts to limit strategic armaments. Whenever possible, 
tey will conclude concrete agreements aimed at achieving these pur- 
poses'* ; Congress considers that the success of the interim agreement 
and the attainment of more permanent and and comprehensive agree- 
ments are dependent upon the preservation of longstanding United 
States policy that neither the Soviet Union nor the United States 
should seek unilateral advantage by developing a first strike potential. 



(2) Treaty between the United States of America and the Union 
of Soviet Socialist Republics on the Limitation of Anti-Ballistic 
Missile Systems, With Associated Protocol J 

Signed May 26, 1972; ratification advised by the Senate August 3, 1972; ratified 
by the President and entered into force October 3, 1972 

The United States of America and the Union of Soviet Socialist 
Republics, hereinafter referred to as the Parties, 

Proceeding from the premise that nuclear war would have devastat- 
ing consequences for all mankind, 

Considering that effective measures to limit anti-ballistic missile sys- 
tems would be a substantial factor in curbing the race in strategic of- 
fensive arms and would lead to a decrease in the risk of outbreak of 
war involving nuclear weapons, 

Proceeding from the premise that the limitation of anti-ballistic 
missile systems, as well as certain agreed measures with respect to the 
limitation of strategic offensive arms, would contribute to the crea- 
tion of more favorable conditions for further negotiations on limiting 
strategic arms, 

Mindful of their obligations under Article VI of the Treaty on the 
Non-Proliferation of Nuclear Weapons, 

Declaring their intention to achieve at the earliest possible date the 
cessation of the nuclear arms race and to take effective measures to- 
ward reductions in strategic arms, nuclear disarmament, and general 
and complete disarmament, 

Desiring to contribute to the relaxation of international tension and 
the strengthening of trust between States, 

Have agreed as follows : 

Article I 

1. Each Party undertakes to limit anti-ballistic missile (ABM) sys- 
tems and to adopt other measures in accordance with the provisions 
of this Treaty. 

2. Each Party undertakes not to deploy ABM systems for a defense 
of the territory of its country and not to provide a base for such a 
defense, and not to deploy ABM systems for defense of an individual 
region except as provided for in Article III of this Treaty. 

Article II 

1. For the purposes of this Treaty an ABM system is a system to 
counter strategic ballistic missiles or their elements in flight trajec- 
tory, currently consisting of : 



23 UST 3435 : TIAS 7503. 

(52) 



53 

(a) ABM interceptor missiles, which are interceptor missiles 
constructed and deployed for an ABM role, or of a type tested in 
an ABM mode ; 

(b) ABM launchers, which are launchers constructed and de- 
ployed for launching ABM interceptor missiles; and 

(c) ABM radars, which are radars constructed and deployed 
for an ABM role, or of a type tested in an ABM mode. 

2. The ABM system components listed in paragraph 1 of this Article 
include those which are : 

(a) operational; 

( b ) under construction ; 

(c) undergoing testing; 

(d ) undergoing overhaul, repair or conversion ; or 

(e) mothballed. 

Article III 

Each party undertakes not to deploy ABM systems or their com- 
ponents except that : 

(a) within one ABM system deployment area having a radius of 
one hundred and fifty kilometers and centered on the Party's national 
capital, a Party may deploy; (1) no more than one hundred ABM 
launchers and no more than one hundred ABM interceptor missiles at 
launch sites, and (2) ABM radars within no more than six ABM radar 
complexes, the area of each complex being circular and have a diameter 
of no more than three kilometers ; and 

(b) within one ABM system deployment area having a radius of 
one hundred and fifty kilometers and containing ICBM silo launchers, 
a Party may deploy: (1) no more than one hundred ABM launchers 
and no more than one hundred ABM interceptor missiles at launch 
sites, (2) two large phased-array ABM radars comparable in potential 
to corresponding ABM radars operational or under construction on 
the date of signature of the Treaty in an ABM system deployment 
area containing TCBM silo launchers, and (3) no more than eighteen 
ABM radars each having a potential less than the potential of the 
smaller of the above-mentioned two large phased-array ABM radars. 

Article IV 

The limitations provided for in Article III shall not apply to ABM 
systems or their components used for development or testing, and lo- 
cated within current or additionally agreed test ranges. Each Party 
may have no more than a total of fifteen ABM launchers at test ranges. 

Article V 

1. Each Party undertakes not to develop, test, or deploy ABM 
systems or components which are sea-based, air-based, space-based, or 
mobile land-based. 

2. Each Party undertakes not to develop, test, or deploy ABM 
launchers for launching more than one ABM interceptor missile at a 
time from each launcher, nor to modify deployed launchers to provide 
them with such a capability, nor to develop, test, or deploy automatic 
or semi-automatic or other similar systems for rapid reload or ABM 
launchers. 



54 
Article VI 

To enhance assurance of the effectiveness of the limitations on ABM 
systems and their components provided by this Treaty, each Party 
undertakes : 

(a) not to give missiles, launchers, or radars, other than ABM inter- 
ceptor missiles, ABM launchers, or ABM radars, capabilities to counter 
strategic ballistic missiles or their elements in flight trajectory, and 
not to test them in an ABM mode ; and 

(b) not to deploy in the future radars for early warning of stra- 
tegic ballistic missile attack except at locations along the periphery 
of its national territory and oriented outward. 

Article VII 

Subject to the provisions of this Treaty, modernization and replace- 
ment of ABM systems of their components may be carried out. 

Article VIII 

ABM systems or their components in excess of the numbers or 
outside the areas specified in this Treaty, as well as ABM systems or 
their components prohibited by this Treaty, shall be destroyed or dis- 
mantled under agreed procedures within the shortest possible agreed 
period of time. 

Article IX 

To assure the viability and effectiveness of this Treaty, each Party 
undertakes not to transfer to other States, and not to deploy outside 
its national territory, ABM systems or their components limited by 
this Treaty. 

Article X 

Each Party undertakes not to assume any international obligations 
which would conflict with this Treaty. 

Article XI 

The Parties undertake to continue active negotiations for limitations 
on strategic offensive arms. 

Article XII 

1. For the purpose of providing assurance of compliance with the 
provisions of this Treaty, each Party shall use national technical 
means of verification at its disposal in a manner consistent with gener- 
ally recognized principles of international law. 

2. Each Party undertakes not to interfere with the national techni- 
cal means of verification of the other Party operating in accordance 
with paragraph 1 of this Article. 

3. Each Party undertakes not to use deliebrate concealment meas- 
ures which impede verification by national technical means of com- 
pliance with the provisions of this Treaty. This obligation shall not 
require changes in current construction, assembly, conversion, or over- 
haul practices. 



55 
Article XIII 

1. To promote the objectives and implementation of the provisions 
of this Treaty, the Parties shall establish promptly a Standing Con- 
sultative Commission, within the framework of which they will: 

(a) consider questions concerning compliance with the obliga- 
tions assumed and related situations which may be considered 
ambiguous: 

(b) provide on a voluntary basis such information as either 
Party considers necessary to assure confidence in compliance with 
the obligations assumed ; 

(c) consider questions involving unintended interference with 
national technical means of verification ; 

(d) consider possible changes in the strategic situation which 
have a bearing on the provisions of this Treaty ; 

(e) agree upon procedures and dates for destruction or dis- 
mantling of ARM systems or their components in cases provided 
for by the provisions of this Treaty ; 

(/) consider, as appropriate, possible proposals for further in- 
creasing the viability of this Treaty, including proposals for 
amendments in accordance with the provisions of this Treaty; 

(g) consider, as appropriate, proposals for further measures 
aimed at limiting strategic arms. 

2. The Parties through consultation shall establish, and may amend 
as appropriate, Regulations for the Standing Consultative Commis- 
sion governing procedures, composition and other relevant matters. 

Article XIV 

1. Each Party may propose amendments to this Treaty. Agreed 
amendments shall enter into force in accordance with the procedures 
governing the entry into force of this Treaty. 

2. Five years after entry into force of this Treaty, and at five year 
intervals thereafter, the Parties shall together conduct a review of this 
Treaty. 

Article XV 

1. This Treaty shall be of unlimited duration. 

2. Each Party shall, in exercising its national sovereignty, have the 
right to withdraw from this Treaty if it decides that extraordinary 
events related to the subject matter of this Treaty have jeopardized its 
supreme interests. It shall give notice of its decision to the other Party 
six months prior to withdrawal from the Treaty. Such notice shall 
include a statement of the extraordinary events the notifying Party 
regards as having jeopardized its supreme interests. 

Article XVI 

1. This Treaty shall be subject to ratification in accordance with 
the constitutional procedures of each Party. The Treaty shall enter 
into force on the day of the exchange of instruments of ratification. 

2. This Treaty shall be registered pursuant to Article 102 of the 
Charter of the United Nations. 2 



See page 004 of text. 



56 

Done at Moscow on May 26, 1972, in two copies, each in the English 
and Russian languages, both texts being equally authentic. 
For the United States of America : 

Richard Nixon, 
President cf the United States of America. 

For the Union of Soviet Socalist Republics : 

L. I. Brezhnev, 
General Secretary of the Central Committee of the CPSU. 



Protocol to the Treaty Between the United States of America and 
the Union of Soviet Socialist Republics on the Limitation of 
Anti-Ballistic Missile Systems 1 

Signed at Moscow July 3, 1974; ratification advised by the Senate November 10, 
1975 ; entered into force May 24, 1976 

The United States of America and the Union of Soviet Socialist 
Republics, hereinafter referred to as the Parties. 

Proceeding from the Basic Principles of Relations between the 
United States of America and the Union of Soviet Socialist Republics 
signed on May 29, 1972, 

Desiring to further the obiectives of the Treaty between the United 
States of America and the Union of Soviet Socialist Republics on the 
Limitation of Anti-Ballistic Missile Systems signed on May 26, 1972, 
hereinafter referred to as the Treaty. 

Reaffirming their conviction that the adoption of further measures 
for the limitation of strategic arms would contribute to strengthening 
international peace and security, 

Proceeding from the premise that further limitation of anti- 
ballistic missile systems will create more favorable conditions for the 
completion of work on a permanent agreement on more complete 
measures for the limitation of strategic offensive arms, 

Have agreed as follows : 

Article I 

1. Each Party shall be limited at any one time to a single area out of 
the two provided in Article III of the Treaty for deployment of anti- 
ballistic missile (ABM) systems or their components and accordingly 
shall not exercise its rights to deploy an ABM system or its compo- 
nents in the second of the two ABM system deployment areas permitted 
by Article III of the Treaty, except as an exchange of one permitted 
area for the other in accordance with Article II of this Protocol. 

2. Accordingly, except as permitted by Article II of this Protocol : 
the United States of America shall not deploy an ABM system or its 
components in the area centered on its capital, as permitted by Article 
III (a) of the Treaty, and the Soviet Union shall not deploy an ABM 
system or its components in the deployment area of intercontinental 
ballistic missile (ICBM) silo launchers permitted by Article III (b) of 
the Treaty. 

!TIAS 8276. 



57 

Article II 

1. Each Party shall have the right to dismantle or destroy its ABM 
system and the components thereof in the area where they are presently 
deployed and to deploy an ABM system or its components in the alter- 
native area permitted by Article III of the Treaty, provided that prior 
to initiation of construction, notification is given in accord with the 
procedure agreed to by the Standing Consultative Commission, during 
the year beginning October 3, 1977, and ending October 2, 1978, or 
during any year which commences at five year intervals thereafter, 
those being the years for periodic review of the Treaty, as provided in 
Article XIV of the Treaty. This right may be exercised only once. 

2. Accordingly, in the event of such notice, the United States would 
have the right to dismantle or destroy the ABM system and its com- 
ponents in the deployment area of ICBM silo launchers and to deploy 
an ABM system or its components in an area centered on its capital, 
as permitted by Article III (a) of the Treaty, and the Soviet Union 
would have the right to dismantle or destroy the ABM system and its 
components in the area centered on its capital and to deploy an ABM 
system or its components in an area containing ICBM silo launchers, 
as permitted by Article 111(b) of the Treaty. 

3. Dismantling or destruction and deployment of ABM systems 
or their components and the notification thereof shall be carried out 
in accordance with Article VIII of the ABM Treaty and procedures 
agreed to in the Standing Consultative Commission. 

Article III 

The rights and obligations established by the Treaty remain in force, 
and shall be complied with by the Parties except to the extent modified 
by this Protocol. In particular, the deployment of an ABM system or 
its components within the area selected shall remain limited by the 
levels and other requirements established by the Treaty. 

Article IV 

This Protocol shall be subject to ratification in accordance with the 
constitutional procedures of each Party. It shall enter into force on the 
day of the exchange of instruments of ratification and shall thereafter 
be considered an integral part of the Treaty. 

Done at Moscow on July 3, 1974, in duplicate, in the English and 
Russian languages, both texts being equally authentic. 
For the United States of America : 
Richard Nixon, 

President of the United States of America. 
For the Union of Soviet Socialist Republics : 
L. I. Brezhnev, 

General Secretary of the Central Committee of the CPSV. 



20-039 O - 78 - 5 



(3) Interim Agreement Between the United States of America 
and the Union of Soviet Socialist Republics on Certain Meas- 
ures With Respect to the Limitation of Strategic Offensive 
Arms, With Associated Protocol 1 

Signed at Moscow on May 26, 1972; Related joint resolution approved Septem 
ber 30, 1972 [Public Law 92-448 2 ] ; Approved by the President of the United 
States of America October 3, 1972; Entered into force October 3, 1972 

The United States of America and the Union of Soviet Socialist 
Republics, hereinafter referred to as the Parties, 

Convinced that the Treaty on the Limitation of Anti-Ballistic 
Missile Systems and this Interim Agreement on Certain Measures 
with Respect to the Limitation of Strategic Offensive Arms will con- 
tribute to the creation of more favorable conditions for active negotia- 
tions on limiting strategic arms as well as to the relaxation of 
international tension and the strengthening of trust between States, 

Taking into account the relationship between strategic offensive and 
defensive arms, 

Mindful of their obligations under Article VI of the Treaty ou the 
Non-Proliferation of Nuclear Weapons, 

Have agreed as follows : 

Article I 

The Parties undertake not to start construction of additional fixed 
land-based intercontinental ballistic missile (ICBM) launchers after 
July 1,1972. 

Article II 

The Parties undertake not to convert land-based launchers for light 
ICBMs, or for ICBMs of older types deployed prior to 1964, into 
land-based launchers for heavy ICBMs of types deployed after that 
time. 

Article III 

The Parties undertake to limit submarine-launched ballistic missile 
(SLBM) launchers and modern ballistic missile submarines to the 
numbers operational and under construction on the date of signature 
of this Interim Agreement, and in addition to launchers and sub- 
marines constructed under procedures established by the Parties as 
replacements for an equal number of ICBM launchers of older types 
deployed prior to 1964 or for launchers on older submarines. 



1 23 UST 3462 : TIAS 7504. The Interim Agreement expired on October 3. 1977. However, 
both the United States and the Soviet Union issued parallel statements announcing that 
they would continue to observe the limitations on strategic buildups which were con- 
tained in the agreement. 

2 See page 50 of text. 

(58) 



59 

Article IV 

Subject to the provisions of this Interim Agreement, modernization 
and replacement of strategic offensive ballistic missiles and launchers 
covered by this Interim Agreement may be undertaken. 

Article V 

1. For the purpose of providing assurance of compliance with the 
provisions of this Interim Agreement, each Party shall use national 
technical means of verification at its disposal in a manner consistent 
with generally recognized principles of international law. 

2. Each Party undertakes not to interfere with the national tech- 
nical means of verification of the other Party operating in accordance 
with paragraph 1 of this Article. 

3. Each Party undertakes not to use deliberate concealment measures 
which impede verification by national technical means of compliance 
with the provisions of this Interim Agreement. This obligation shall 
not require changes in current construction, assembly, conversion, or 
overhaul practices. 

Article VI 

To promote the objectives and implementation of the provisions of 
this Interim Agreement, the Parties shall use the Standing Consulta- 
tive Commission established under Article XIII of the Treaty on the 
Limitation of Anti-Ballistic Missile Systems in accordance with the 
provisions of that Article. 

Article VII 

The Parties undertake to continue active negotiations for limitations 
on strategic offensive arms. The obligations provided for in this In- 
terim Agreement shall not prejudice the scope or terms of the limita- 
tions on strategic offensive arms which may be worked out in the 
course of further negotiations. 

Article VIII 

1. This Interim Agreement shall enter into force upon exchange of 
written notices of acceptance by each Party, which exchange shall take 
place simultaneously with the exchange of instruments of ratification 
of the Treaty on the Limitation of Ant i -Ballistic Missile Systems. 

2. This Interim Agreement shall remain in force for a period of five 
years unless replaced earlier by an agreement on more complete meas- 
ures limiting strategic offensive arms. It is the objective of the Parties 
to conduct active follow-on negotiations with the aim of concluding 
such an agreement as soon as possible. 

3. Each Party shall, in exercising its national sovereignty, have the 
right to withdraw from this Interim Agreement if it decides that 
extraordinary events related to the subject matter of this Interim 
Agreement have jeopardized its supreme interests. It shall give notice 
of its decision to the other Party six months prior to withdrawal from 
this Interim Agreement. Such notice shall include a statement of the 



60 

extraordinary events the notifying Party regards as having jeopard- 
ized its supreme interests. 

Done at Moscow on May 26, 1972, in two copies, each in the English 
and Russian languages, both texts being equally authentic. 

For the United States of America : 

Richard Nixon, 

President of the United States of America. 

For the Union of Soviet Socialist Republics : 

L. I. Brezhnev, 
General Secretary of the Central Committee of the CPSU. 



Protocol to the Interim Agreement Between the United States of 
America and the Union of Soviet Socialist Republics on Certain 
Measures with respect to the Limitation of Strategic Offensive 
Arms 

Signed at Moscow May 26, 1972 

The United States of America and the Union of Soviet Socialist 
Republics, hereinafter referred to as the Parties. 

Having agreed on certain limitations relating to submarine- 
launched ballistic missile launchers and modern ballistic missile sub- 
marines, and to replacement procedures, in the Interim Agreement, 

Have agreed as follows : 

The Parties understand that, under Article III of the Interim 
Agreement, for the period during which that Agreement remains in 
force : 

The U.S. may have no more than 710 ballistic missile launchers 
on submarines (SLBMs) and no more than 44 modern ballistic missile 
submarines. The Soviet Union may have no more than 950 ballistic 
missile launchers on submarines and no more than 62 modern ballistic 
missile submarines. 

Additional ballistic missile launchers on submarines up to the above- 
mentioned levels, in the U.S. — over 656 ballistic missile launchers on 
nuclear-powered submarines, and in the U.S.S.R. — over 740 ballistic 
missile launchers on nuclear-powered submarines, operational and 
under construction, may become operational as replacements for equal 
numbers of ballistic missile launchers of older types deployed prior 
to 1964 or of ballistic missile launchers on older submarines. 

The deplovment of modern SLBMs on any submarine, regardless 
of tvpe, will be counted against the total level of SLBMs permitted 
for the U.S. and the U.S.S.R. 

This Protocol shall be considered an integral part of the Interim 
Agreement. 

Done at Moscow this 26th day of May, 1972. 

For the United States of America : 

Rtctiard Nixon, 
President of the United States of America. 

For the Union of Soviet Socialist Republics : 

L. I. Brezhnev, 
General Secretary of the Central Committee of the CPSU. 



(4) Agreed Interpretations and Unilateral Statements 

1. Agreed Interpretations 

(a) Initialed Statements. — The texts of the statements set out below 
were agreed upon and initialed bv the Heads of the Delegations on 
May 26, 1972. 

ABM TREATY 

[A] 

The Parties understand that, in addition to the ARM radars which 
may be deployed in accordance with subparagraph (a) of Article III 
of the Treaty, those non-phased-array ARM radars operational on the 
date of signature of the Treaty within the ARM system deployment 
area for defense of the national capital may be retained. 

[B] 

The Parties understand that the potential (the product of mean 
emitted power in watts and antenna area in square meters) of the 
smaller of the two large phased-array ARM radars referred to in sub- 
paragraph (b) of Article III of the Treaty is considered for purposes 
of the Treaty to be three million. 

[C] 

The Parties understand that the center of the ARM system deploy- 
ment area centered on the national capital and the center of the ARM 
system deployment area containing ICRM silo launchers for each 
Party shall be separated by no less than thirteen hundred kilometers. 

[D] 

The Parties agree not to deploy phased-array radars having a po- 
tential (the product of mean emitted power in watts and antenna area 
in square meters) exceeding three million, except as provided for in 
Articles III. IV and VI of the Treaty, or except for the purposes of 
tracking objects in outer space or for use as national technical means 
of verification. 

[E] 

In order to insure fulfillment of the obligation not to deploy ARM 
systems and their components except as provided in Article III of the 
Treaty, the Parties agree that in the event ARM systems based on 
other physical principles and including components capable of sub- 
stituting for ARM interceptor missiles, ARM launchers, or ARM 
radars are created in the future, specific limitations on such systems 

(61) 



62 

and their components would be subject to discussion in accordance 
with Article XIII and agreement in accordance with Article XIV of 
the Treaty. 

[P] 

The Parties understand that Article V of the Treaty includes obli- 
gations not to develop, test or deploy ABM interceptor missiles for 
the delivery by each ABM interceptor missile of more than one inde- 
pendently guided warhead. 

[G] 

The Parties understand that Article IX of the Treaty includes the 
obligation of the U.S. and the USSR not to provide to other States 
technical descriptions or blueprints specially worked out for the con- 
struction of ABM systems and their components limited by the Treaty. 

INTERIM AGREEMENT 

[H] 

The Parties understand that land-based ICBM launchers referred 
to in the Interim Agreement are understood to be launchers for stra- 
tegic ballistic missiles capable of ranges in excess of the shortest dis- 
tance between the northeastern border of the contental U.S. and the 
northwestern border of the continental USSR. 

[i] 

The Parties understand that fixed land based ICBM launchers 
under active construction as of the date of signature of the Interim 
Agreement may be completed. 

[j] 

The Parties understand that in the process of modernization and 
replacement the dimensions of land-based ICBM silo launchers will 
not be significantly increased. 

[K] 

The Parties understand that dismantling or destruction of ICBM 
launchers of older types deployed prior to 1964 and ballistic missile 
launchers on older submarines being replaced by new SLBM launchers 
on modern submarines will be initiated at the time of the beginning of 
sea trials of a replacement submarine, and will be completed in the 
shortest possible agreed period of time. Such dismantling or destruc- 
tion, and timely notification thereof, will be accomplished under pro- 
cedures to be agreed in the Standing Consultative Commission. 

EL] 

The Parties understand that during the period of the Interim 
Agreement there shall be no significant increase in the number of 
ICBM or SLBM test and training launchers, or in the number of such 
launchers for modern land-based heavy ICBMs. The Parties further 
understand that construction or conversion of ICBM launchers at test 



63 

ranges shall be undertaken only for purposes of testing and training. 

(b) Common Understandings. — Common understanding of the 

Parties on the following matters was reached during the negotiations : 

A. INCREASE IN ICBM SILO DIMENSIONS 

Ambassador Smith made the following statement on May 26, 1972 : 
"The Parties agree that the term 'significantly increased' means 

that an increase will not be greater than 10-15 percent of the present 

dimensions of land-based ICBM silo launchers." 
Minister Semenov replied that this statement corresponded to the 

Soviet understanding. 

H. LOCATION OF ICBM DEFENSES 

The U.S. Delegation made the following statement on May 20, 1972 : 
"Article III of the ABM Treaty provides for each side one ABM 
system deployment area centered on its national capital and one 
ABM system deployment area containing ICBM silo launchers. The 
two sides have registered agreement on the following statement: 'The 
Parties understand that the center of the ABM system deployment 
area centered on the national capital and the center of the ABM sys- 
stem deployment area containing ICBM silo launchers for each Party 
shall be separated bv no less than thirteen hundred kilometers.' In 
this connection, the U.S. side notes that its ABM system deployment 
area for defense of ICBM silo launchers, located west of the Missis- 
sippi River, will be centered in the Grand Forks ICBM silo launcher 
deployment area." (See Initialed Statement [C].) 

C. ABM TEST RANGES 

The U.S. Delegation made the following statement on April 26, 
1972: 

"Article IV of the ABM Treaty provides that 'the limitations 
provided for in Article III shall not apply to ABM systems or their 
components used for development or testing, and located within cur- 
rent or additionally agreed test ranges.' We believe it would be useful 
to assure that there is no misunderstanding as to current ABM test 
ranges. It is our understanding that ABM test ranges encompass the 
area within which ABM components are located for test purposes. The 
current U.S. ABM test ranges are at White Sands, New Mexico, and 
at Kwaialein Atoll, and the current Soviet ABM test range is near 
Sary Shagan in Kazakhstan. We consider that non-phased array 
radars of types used for range safety or instrumentation purposes 
may be located outside of ABM test ranges. We interpret the reference 
in Article IV to 'additionally agreed test ranges' to mean that ABM 
components will not be located at any other test ranges without prior 
agreement between our Governments that there will be such additional 
ABM test ranges." 

On May 5, 1972, the Soviet Delegation stated that there was a com- 
mon understanding on what ABM test ranges were, that the use of the 



64 

types of non-ABM radars for range safety or instrumentation was not 
limited under the Treaty, that the reference in Article IV to "addi- 
tionally agreed" test ranges was sufficiently clear, and that national 
means permitted identifying current test ranges. 

D. MOBILE ABM SYSTEMS 

On January 28, 1972, the U.S. Delegation made the following 
statement : 

"Article V(I) of the Joint Draft Text of the ABM Treaty includes 
an undertaking not to develop, test, or deploy mobile land-based ABM 
systems and their components. On May 5, 1971, the U.S. side indicated 
that, in its view, a prohibition on deployment of mobile ABM systems 
and components would rule out the deployment of ABM launchers 
and radars which were not permanent fixed types. At that time, we 
asked for the Soviet view of this interpretation. Does the Soviet side 
agree with the U.S. side's interpretation put forward on May 5, 1971 ?" 

On April 13, 1972, the Soviet Delegation said there is a general com- 
mon understanding on this matter. 

E. STANDING CONSULTATIVE COMMISSION 

Ambassador Smith made the following statement on Mav 22, 1972 : 
"The United States proposes that the sides agree that, with regard 
to initial implementation of the ABM Treaty's Article XIII on the 
Standing Consultative Commission (SCC) and of the consultation 
Articles to the Interim Agreement on offensive arms and the Accidents 
Agreement, 1 agreement establishing the SCC will be worked out early 
in the follow-on SALT negotiations; until that is completed, the fol- 
lowing arrangements will prevail : when SALT is in session, any con- 
sultation desired by either side under these Articles can be carried out 
by the two SALT Delegations : when SALT is not in session, ad hoc 
arrangements for any desired consultations under these Articles may 
be made through diplomatic channels." 

Minister Semenov replied that, on an ad referendum basis, he could 
agree that the U.S. statement corresponded to the Soviet understand- 
ing. 

F. STANDSTILL 

On May 6, 1972, Minister Semenov made the following statement : 

"In an effort to accommodate the wishes of the U.S. side, the Soviet 
Delegation is prepared to proceed on the basis that the two sides will 
in fact observe the obligations of both the Interim Agreement and the 
ABM Treaty beginning from the date of signature of these two 
documents." 

In replv, the U.S. Delegation made the following statement on 
Mav 20, 1972: 

"The U.S. agrees in principle with the Soviet statement made on 
May 6 concerning observance of obligations beginning from date of 
signature but we would like to make clear our understanding that this 

1 S*»e Article 7 of Agreement to Reduce the Risk of Outbreak of Nuclear War Between 
the United States of America and the Union of Soviet Socialist Republics, signed Sept. 30, 
1971, p. 45. 



65 

means that, pending ratification and acceptance, neither side would 
take any action prohibited by the agreements after they had entered 
into force. This understanding would continue to apply in the absence 
of notification by either signatory of its intention not to proceed with 
ratification or approval." 
The Soviet Delegation indicated agreement with the U.S. statement 

2. Unilateral Statements 

(a) The following noteworthy unilateral statements were made 
during the negotiations by the United States Delegation : 

A. WITHDRAWAL EROM THE ABM TREATY 

On May 9, 1972, Ambassador Smith made the following statement: 
"The U.S. Delegation has stressed the importance the U.S. Gov- 
ernment attaches to achieving agreement on more complete limita- 
tions on strategic offensive arms, following agreement on an ABM 
Treaty and on an Interim Agreement on certain measures with re- 
spect to the limitation of strategic offensive arms. The U.S. Delega- 
tion believes that an objective of the follow-on negotiations should be to 
constrain and reduce on a long-term basis threats to the survivability 
of our respective strategic retaliatory forces. The USSR Delegation 
has also indicated that the objectives of SALT would remain unful- 
filled without the achievement of an agreement providing for more 
complete limitations on strategic offensive arms. Both sides recognize 
that the initial agreements would be steps toward the achievement of 
more complete limitations on strategic arms. If an agreement provid- 
ing for more complete strategic offensive arms limitations were not 
achieved within five years, U.S. supreme interests could be jeop- 
ardized. Should that occur, it would constitute a basis for withdrawal 
from the ABM Treaty. The U.S. does not wish to see such a situation 
occur, nor do we believe that the USSR does. It is because we wish to 
prevent such a situation that we emphasize the importance the U.S. 
Government attaches to achievement of more complete limitations on 
strategic offensive arms. The U.S. Executive will inform the Con- 
gress, in connection with Congressional consideration of the ABM 
Treaty and the Interim Agreement, of this statement of the U.S. 
position." 

B. LAND-MOBILE ICBM LAUNCHERS 

The U.S. Delegation made the following statement on May 20, 
1972: 

"In connection with the important subject of land-mobile ICBM 
launchers, in the interest of concluding the Interim Agreement the 
U.S. Delegation now withdraws its proposal that Article I or an 
agreed statement explicitly prohibit the deployment of mobile land- 
based ICBM launchers. I have been instructed to inform you that, 
while agreeing to defer the question of limitation of operational land- 
mobile ICBM launchers to the subsequent negotiations on more com- 
plete limitations on strategic offensive arms, the U.S. would consider 
the deplovment of opertional land-mobile ICBM launchers during 
the period of the Interim Agreement as inconsistent with the objec- 
tives of that Agreement," 



fc> 



C. COVERED FACILITIES 



The U.S. Delegation made the following statement on May 20, 1972 : 
"I wish to emphasize the importance that the United States at- 
taches to the provisions of Article V, including in particular their 
application to fitting out or berthing submarines." 



The U.S. Delegation made the following statement on May 26, 1972 : 
"The U.S. Delegation regrets that the Soviet Delegation has not 
been willing to agree on a common definition of a heavy missile. 
Under these circumstances, the U.S. Delegation believes it necessary 
to state the following : The United States would consider any ICBM 
having a volume significantly greater than that of the largest light 
ICBM now operational on either side to be a heavy ICBM. The U.S. 
proceeds on the premise that the Soviet side will give due account to 
this consideration." 

E. TESTED IN ABM MODE 

On April 7, 1972, the U.S. Delegation made the following statement : 
"Article II of the Joint Text Draft uses the term 'tested in an 
ABM mode,' in defining ABM components, and Article VI includes 
certain obligations concerning such testing. We believe that the sides 
should have a common understanding of this phrase. First, we would 
note that the testing provisions of the ABM Treaty are intended to 
apply to testing which occurs after the date of signature of the Treaty, 
and not to any testing which may have occurred in the past. Next, we 
would amplify the remarks we have made on this subject during the 
previous Helsinki phase by setting forth the objectives which govern 
the U.S. view on the subject, namely, while prohibiting testing of non- 
ABM components for ABM purposes : not to present testing of ABM 
components, and not to prevent testing of non-ABM components for 
non-ABM purposes. To clarify our interpretation of 'tested in an 
ABM mode,' we note that we would consider a launcher, missile or 
radar to be 'tested in an ABM model' if, for example, any of the 
following events occur: (1) a launcher is used to launch an ABM 
interceptor missile, (2) an interceptor missile is flight tested against 
a target vehicle which has a flight trajectory with characteristics of a 
strategic ballistic missile flight trajectory, or is flight tested in con- 
junction with the test of an ABM interceptor missile or an ABM 
radar at the same test range, or is flight tested to an altitude in- 
consistent with interception of targets against which air defenses are 
deployed, (3) a radar makes measurements on a cooperative target 
vehicle of the kind referred to in item (2) above during the reentry 
portion of its trajectory or makes measurements in conjunction with 
the test of an ABM interceptor missile or an ABM radar at the same 
test range. Radars used for purposes such as range safety or instru- 
mentation would be exempt from application of these criteria." 

P. NO-TRANSFER ARTICM1 OP ABM TREATY 

On April 18, 1972, the U.S. Delegation made the following state- 
ment: 



67 

"In regard to this Article [IX], I have a brief and I believe self- 
explanatory statement to make. The U.S. side wishes to make clear 
that the provisions of this Article do not set a precedent for whatever 
provision may be considered for a Treaty on Limiting Strategic Of- 
fensive Arms. The question of transfer of strategic offensive arms is 
a far more complex issue, which may require a different solution." 

O. NO INCREASE IN DEFENSE OF EARLY WARNING RADARS 

On July 28, 1970, the U.S. Delegation made the following statement : 
"Since Hen House radars [Soviet ballistic missile early warning 
radars] can detect and track ballistic missile warheads at great dis- 
tances, they have a significant ABM potential. Accordingly, the U.S. 
would regard any increase in the defenses of such radars by surface- 
to-air missiles as inconsistent with an agreement." 

******* 

(b) The following noteworthy unilateral statement was made by 
the Delegation of the U.S.S.R. and is shown here with the U.S. reply : 

On May 17, 1972, Minister Semenov made the following unilateral 
"Statement of the Soviet Side" : 

"Taking into account that modern ballistic missile submarines are 
presently in the possession of not only the U.S., but also of its NATO 
allies, the Soviet Union agrees that for the period of effectiveness of 
the Interim 'Freeze' Agreement the U.S. and its NATO allies have 
up to 50 such submarines with a total of up to 800 ballistic missile 
launchers thereon (including 41 U.S. submarines with 656 ballistic 
missile launchers). However, if during the period of effectiveness of 
the Agreement U.S. allies in NATO should increase the number of 
their modern submarines to exceed the numbers of submarines they 
would have operational or under construction on the date of signature 
of the Agreement, the Soviet Union will have the right to a corre- 
sponding increase in the number of its submarines. In the opinion 
of the Soviet side, the solution of the question of modern ballistic 
missile submarines provided for in the Interim Agreement only 
partially compensates for the strategic imbalance in the deployment of 
the nuclear-powered missile submarines of the USSR and the U.S. 
Therefore, the Soviet side believes that this whole question, and above 
all the question of liquidating the American missile submarine bases 
outside the U.S., will be appropriately resolved in the course of 
follow-on negotiations." 

On May 24, Ambassador Smith made the following reply to Min- 
ister Semenov : 

"The United States side has studied the 'statement made by the 
Soviet side' of May 17 concerning compensation for submarine basing 
and SLBM submarines belonging to third countries. The United 
States does not accept the validity of the considerations in that 
statement." 

On Mav 26 Minister Semenov repeated the unilateral statement 
made on May 24. Ambassador Smith also repeated the U.S. rejection 
on May 26. 



(5) Standing Consultative Commission on Arms Limitation 1 

Memorandum of Understanding signed at Geneva December 21, 1972; Entered 
into force December 21, 1972 

Memorandum of Understanding Between the Government of the 
United States of America and the Government of the Union 
of Soviet Socialist Republics Regarding the Establishment of 
a Standing Consultative Commission 



The Government of the United States of America and the Govern- 
ment of the Union of Soviet Socialist Republics hereby establish a 
Standing Consultative Commission. 

II 

The Standing Consultative Commission shall promote the objec- 
tives and implementation of the provisions of the Treaty between the 
USA and the USSR on the Limitation of Anti-Ballistic Missile Sys- 
tems of May 26, 1972, 2 the Interim Agreement between the USA and 
the USSR on Certain Measures with Respect to the Limitation of 
Strategic Offensive Arms of May 26, 1972, 3 and the Agreement on 
Measures to Reduce the Risk of Outbreak of Nuclear War between 
the USA and the USSR of September 30, 19T1, 4 and shall exercise 
its competence in accordance with the provisions of Article XIII of 
said Treaty, Article VI of said Interim Agreement, and Article 7 of 
said Agreement on Measures. 

Ill 

Each Government shall be represented on the Standing Consulta- 
tive Commission by a Commissioner and a Deputy Commissioner, 
assisted by such staff as it deems necessary. 

IV 

The Standing Consultative Commission shall hold periodic sessions 
on dates mutually agreed by the Commissioners but no less than two 
times per year. Sessions shall also be convened as soon as possible, 
following reasonable notice, at the request of either Commissioner. 



* 24 UST 238 ; TIAS 7545. 
2 See page 52 of text. 

8 See page 58 of text. 

* See page 44 of text. 

(68) 



The Standing Consultative Commission shall establish and approve 
Regulations governing procedures and other relevant matters and may 
amend them as it deems appropriate. 

VI 

The Standing Consultative Commission will meet in Geneva. It 
may also meet at such other places as may be agreed. 

Done in Geneva, on December 21, 1972, in two copies, each in the 
English and Russian languages, both texts being equally authentic. 



(6) Standing Consultative Commission on Arms Limitation: 

Regulations 1 

Protocol, with regulations, signed at Geneva May 30, 1973; Entered into force 

May 30, 1973 

Standing Consultative Commission 

protocol 

Pursuant to the provisions of the Memorandum of Understanding 
between the Government of the United States of America and the 
Government of the Union of Soviet Socialist Republics Regarding the 
Establishment of a Standing Consultative Commission, dated Decem- 
ber 21, 1972, 2 the undersigned, having been duly appointed by their 
respective Governments as Commissioners of said Standing Consulta- 
tive Commission, hereby establish and approve, in the form attached, 
Regulations governing procedures and other relevant matters of the 
Commission, which Regulations shall enter into force upon signature 
of this Protocol and remain in force until and unless amended by the 
undersigned or their successors. 

Done in Geneva on May 30, 1973, in two copies each in the English 
and Russian languages, both texts being equally authentic. 

ATTACHMENT 

Standing Consultative Commission 
regulations 

1. The Standing Consultative Commission, established by the 
Memorandum of Understanding between the Government of the 
United States of America and the Government of the Union of Soviet 
Socialist Republics Regarding the Establishment of a Standing Con- 
sultative Commission of December 21, 1972, shall consist of a U.S. 
component and Soviet component, each of which shall be headed by a 
Commissioner. 

2. The Commissioners shall alternately preside over the meetings. 

3. The Commissioners shall, when possible, inform each other in 
advance of the matters to be submitted for discussion, but may at a 
meeting submit for discussion any matter within the competence of 
the Commission. 

4. During intervals between sessions of the Commission, each Com- 
missioner may transmit written or oral communications to the other 
Commissioner concerning matters within the competence of the 
Commission. 



i 24 UST 1124 ; TIAS 7637. 
2 See page 68 of text. 



(70) 



71 

5. Each component of the Commission may invite such advisers 
and experts as it deems necessary to participate in a meeting. 

6. The Commission may establish working groups to consider and 
prepare specific matters. 

7. The results of the discussion of questions at the meetings of the 
Commission may, if necessary, be entered into records which shall be 
in two copies, each in the English and the Kussian languages, both 
texts being equally authentic. 

8. The proceedings of the Standing Consultative Commission shall 
be conducted in private. The Standing Consultative Commission may 
not make its proceedings public except with the express consent of 
both Commissioners. 

9. Each component of the Commission shall bear the expenses con- 
nected with its participation in the Commission. 



g. Agreement Between the United States of America and the 
Union of Soviet Socalist Republics on the Prevention of Nuclear 
War 1 

Agreement signed at Washington June 23, 1973; Entered into force June 22, 1973 

The United States of America and the Union of Soviet Socialist 
Republics, hereinafter referred to as the Parties, 

Guided by the objectives of strengthening world peace and inter- 
national security, 

Conscious that nuclear war would have devastating consequences for 
mankind, 

Proceeding from the desire to bring about conditions in which the 
danger of an outbreak of nuclear war anywhere in the world would 
be reduced and ultimately eliminated, 

Proceeding from their obligations under the Charter of the United 
Nations regarding the maintenance of peace, refraining from the 
threat or use of force, and the avoidance of war, and in conformity 
with the agreements to which either Party has subscribed, 

Proceeding from the Basic Principles of Relations between the 
United States of America and the Union of Soviet Socialist Republics 
signed in Moscow on May 29, 1972, 2 

Reaffirming that the development of relations between the United 
States of America and the Union of Soviet Socialist Reublics is not 
directed against other countries and their interests, 

Have agreed as follows : 

Article I 

The United States and the Soviet Union agree that an objective of 
their policies is to remove the danger of nuclear war and of the use of 
nuclear weapons. 

Accordingly, the Parties agree that they will act in such a manner 
as to prevent the development of situations capable of causing a 
dangerous exacerbation of their relations, as to avoid military con- 
frontations, and as to exclude the outbreak of nuclear war between 
them and between either of the Parties and other countries. 

Article II 

The Parties agree, in accordance with Article I and to realize the 
objective stated in that Article, to proceed from the premise that each 
Party will refrain from the threat or use of force against the other 
Party, against the allies of the other Party and against other coun- " 
tries, in circumstances which may endanger international peace and 
security. The Parties agree that they will be guided by these consider- 
ations in the formulation of their foreign policies and in their actions 
in the field of international relations. 



»24 UST 1478; TIAS 7654. 

* Department of State Bulletin, June 26, 1972, p. 898. 

(72) 



73 
Article III 

The Parties undertake to develop their relations with each other and 
with other countries in a way consistent with the purposes of this 
Agreement. 

Article IV 

If at any time relations between the Parties or between either Party 
and other countries appear to involve the risk of a nuclear conflict, or 
if relations between countries not parties to this Agreement appear 
to involve the risk of nuclear war between the United States of Amer- 
ica and the Union of Soviet Socialist Republics or between either 
Party and other countries, the United States and the Soviet Union, 
acting in accordance with the provisions of this Agreement, shall im- 
mediately enter into urgent consultations with each other and make 
every effort to avert this risk. 

Article V 

Each Party shall be free to inform the Security Council of the 
United Nations, the Secretary General of the United Nations and the 
Governments of allied or other countries of the progress and outcome 
of consultations initiated in accordance with Article IV of this 
Agreement. 

Article VI 

Nothing in this Agreement shall affect or impair : 

(a) the inherent right of individual or collective self-defense as 
envisaged by Article 51 of the Charter of the United Nations. 3 

(b) the provisions of the Charter of the United Nations, including 
those relating to the maintenance or restoration of international peace 
and security, and 

(c) the obligations undertaken by either Party towards its allies 
or other countries in treaties, agreements, and other appropriate 
documents. 

Article VII 

This Agreement shall be of unlimited duration. 

Article VIII 

This Agreement shall enter into force upon signature. 
Done at Washington on June 22, 1973, in two copies, each in the 
English and Russian languages, both texts being equally authentic. 

8 TS 993 ; 59 Stat. 1044. See page 594 of text. 



20-039 O - 78 



h. Chemical and Biological Warfare 

(1) Geneva Protocol of 1925 (with reservation) 

Protocol Prohibiting the Use in War of Asphyxiating, Poisonous or Other 
Gases, and of Bacteriological Methods of Warfare; Done at Geneva June 17, 
1925; Ratification advised by the Senate December 16, 1974; Ratification de- 
posited April 10, 1975 x 

The undersigned plenipotentiaries, in the name of their respective 
Governments : 

Whereas the use in war of asphyxiating, poisonous or other gases, 
and of all analogous liquids, materials or devices, has been justly con- 
demned by the general opinion of the civilised world ; and 

Whereas the prohibition of such use has been declared in Treaties 
to which the majority of Powers of the world are Parties ; and 

To the end that this prohibition shall be universally accepted as a 
part of International Law, binding alike the conscience and the prac- 
tice of nations; 

Declare : 

That the High Contracting Parties, so far as they are not al- 
ready Parties to Treaties prohibiting such use, accept this prohibi- 
tion, agree to extend this prohibition to the use of bacteriological 
methods of warfare and agree to be bound as between themselves 
according to the terms of this declaration. 

The High Contracting Parties will exert every effort to induce other 
States to accede to the present Protocol. Such accession will be notified 
to the Government of the French Republic, and by the latter to all 
signatory and acceding Powers, and will take effect on the date of the 
notification by the Government of the French Republic. 

The present Protocol, of which the French and English texts are 
both authentic, shall be ratified as soon as possible. It shall bear to- 
day's date. 

The ratifications of the present Protocol shall be addressed to the 
Government of the French Republic, which will at once notify the de- 
posit of such ratification to each of the signatory and acceding Powers. 

The instruments of ratification of and accession to the present Pro- 
tocol will remain deposited in the archives of the Government of the 
French Republic. 

The present Protocol will come into force for each signatory Power 
as from the date of deposit of its ratification, and, from that moment, 
each Power will be bound as regards other Powers which have already 
deposited their ratifications. 

In witness whereof the Plenipotentiaries have signed the present 
Protocol. 



i TIAS 8061. For a list of states which are parties to the Protocol, see Dept. of State 
publication. Treaties in Force. See also Executive Order 11850 (section D, volume I) which 
discusses U.S. policy on the uses of chemical herbicides and riot control agents. 

(74) 



75 

Done at Geneva in a single copy, this seventeenth day of June, One 
Thousand Nine Hundred and Twenty-Five. 



Ratification of Geneva Protocol of 1925, with Reservation 

Resolved, (two-thirds of the Senators present concurring therein), That 
the Senate advise and consent to the ratification of The Protocol for the 
Prohibition of the Use in War of Asphyxiating, Poisonous, or other Gases, 
and of Bacteriological Methods of Warfare, signed at Geneva on June 17, 
1925 (Ex. J, 91-2) subject to the following reservation : 

That the said Protocol shall cease to be binding on the Government of 
the United States with respect to the use in war of asphyxiating, poisonous 
or other gases, and of all analogous liquids, materials, or devices, in regard 
to an enemy State if such State or any of its allies fails to respect the 
prohibitions laid down in the Protocol. 



(2) Biological Weapons Convention 

Convention on the Prohibition of the Development, Production and Stockpiling 
of Bacteriological (Biological) and Toxin Weapons and on Their Destruction; 
Done at Washington, London, and Moscow April 10, 1972; Ratification 
advised by the Senate December 16, 1974; Ratification deposited March 26, 
1975; Proclaimed by the President March 26, 1975; Entered into force March 
26,197s 1 

The States Parties to this Convention, 

Determined to act with a view to achieving effective progress to- 
wards general and complete disarmament, including the prohibition 
and elimination of all types of weapons of mass destruction, and con- 
vinced that the prohibition of the development, production and stock- 
piling of chemical and bacteriological (biological) weapons and their 
elimination, through effective measures, will facilitate the achievement 
of general and complete disarmament under strict and effective inter- 
national control, 

Recognizing the important significance of the Protocol for the Pro- 
hibition of the Use in War of Asphyxiating, Poisonous or Other Gases, 
and of Bacteriological Methods of Warfare, signed at Geneva on June 
17, 1925, 2 and conscious also of the contribution which the said Proto- 
col has already made, and continues to make, to mitigating the horrors 
of war. 

Reaffirming their adherence to the principles and objectives of that 
Protocol and calling upon all States to comply strictly with them, 

Recalling that the General Assembly of the United Nations has 
repeatedly condemned all actions contrary to the principles and objec- 
tives of the Geneva Protocol of June 17, 1925, 

Desiring to contribute to the strengthening of confidence between 
peoples and the general improvement of the international atmosphere, 

Desiring also to contribute to the realization of the purposes and 
principles of the Charter of the United Nations, 

Convinced of the importance and urgency of eliminating from the 
arsenals of States, through effective measures, such dangerous weapons 
of mass destruction as those using chemical or bacteriological (bio- 
logical) agents, 

Recognizing that an agreement on the prohibition of bacteriological 
(biological) and toxin weapons represents a first possible step towards 
the achievement of agreement on effective measures also for the pro- 
hibition of the development, production and stockpiling of chemical 
weapons, and determined to continue negotiations to that end, 

Determined, for the sake of all mankind, to exclude completely the 
possibility of bacteriological (biological) agents and toxins being used 
as weapons, 



lf HAS 8062. For a list of states which are parties to the Convention, see Dept. of State 
publication. Treaties in Force. See also Executive Order 11850 (section D. volume I) which 
discusses U.S. policy on the uses of chemical herbicides and riot control agents. 

2 For text, see page 74. 

(76) 



77 

Convinced that such use would be repugnant to the conscience of 
mankind and that no effort should be spared to minimize this risk, 
Have agreed as follows : 

AKTICLE I 

Each State Party to this Convention undertakes never in any cir- 
cumstances to develop, produce, stockpile or otherwise acquire or 
retain : 

(1) Microbial or other biological agents, or toxins whatever their 
origin or method of production, of types and in quantities that have no 
justification for prophylactic, protective or other peaceful purposes; 

(2) Weapons, equipment or means of delivery designed to use such 
agents or toxins for hostile purposes or in armed conflict. 

ARTICLE II 

Each State Party to this Convention undertakes to destroy, or to 
divert to peaceful purposes, as soon as possible but not later than nine 
months after the entry into force of the Convention, all agents, toxins, 
weapons, equipment and means of delivery specified in article I of the 
Convention, which are in its possession or under its jurisdiction or 
control. In implementing the provisions of this article all necessary 
safety precautions shall be observed to protect populations and the 
environment. 

ARTICLE III 

Each State Party to this Convention undertakes not to transfer to 
any recipient whatsoever, directly or indirectly, and not in any way to 
assist, encourage, or induce any State, group of States or international 
organizations to manufacture or otherwise acquire any of the agents, 
toxins, weapons, equipment or means of delivery specified in article I 
of the Convention. 

ARTICLE IV 

Each State Party to this Convention shall, in accordance with its 
constitutional processes, take any necessary measures to prohibit and 
prevent the development, production, stockpiling, acquisition or reten- 
tion of the agents, toxins, weapons, equipment and means of delivery 
specified in article I of the Convention, within the territory of sucn 
State, under its jurisdiction or under its control anywhere. 

ARTICLE V 

The States Parties to this Convention undertake to consult one an- 
other and to cooperate in solving any problems which may arise in 
relation to the obiective of, or in the application of the provisions of, 
the Convention. Consultation and cooperation pursuant to this article 
may also be undertaken through appropriate international procedures 
within the framework of the United Nations and in accordance with 
its Charter. 

ARTICLE VI 

(1) Any State Party to this Convention which finds that any other 
State Party is acting in breach of obligations deriving from the pro- 



78 

visions of the Convention may lodge a complaint with the Security 
Council of the United Nations. Such a complaint should include all 
possible evidence confirming its validity, as well as a request for its 
consideration by the Security Council. 

(2) Each State Party to this Convention undertakes to cooperate in 
carrying out any investigation which the Security Council may 
initiate, in accordance with the provisons of the Charter of the United 
Nations, on the basis of the complaint received by the Council. The 
Security Council shall inform the States Parties to the Convention of 
the results of the investigation. 

AKTICLE VII 

Each State Party to this Convention undertakes to provide or sup- 

?ort assistance, in accordance with the United Nations Charter, to any 
'arty to the Convention which so requests, if the Security Council 
decides that such Party has been exposed to danger as a result of viola- 
tion of the Convention. 

AKTICLE VIII 

Nothing in this Convention shall be interpreted as in any way lim- 
iting or detracting from the obligations assumed by any State under 
the Protocol for the Prohibition of the Use in War of Asphyxiating, 
Poisonous or Other Gases, and of Bacteriological Methods of Warfare, 
signed at Geneva on June 17, 1925. 

AKTICLE IX 

Each State Party to this Convention affirms the recognized objective 
of effective prohibition of chemical weapons and, to this end, under- 
takes to continue negotiations in good faith with a view to reaching 
early agreement on effective measures for the prohibition of their 
development, production and stockpiling and for their destruction, and 
on appropriate measures concerning equipment and means of delivery 
specifically designed for the production or use of chemical agents for 
weapons purposes. 

ARTICLE X 

(1) The States Parties to this Convention undertake to facilitate, 
and have the right to participate in, the fullest possible exchange of 
equipment, materials and scientific and technological information for 
the use of bacteriological (biological) agents and toxins for peaceful 
purposes. Parties to the Convention in a position to do so shall also 
cooperate in contributing individually or together with other States or 
international organizations to the further development and applica- 
tion of scientific discoveries in the field of bacteriology (biology) for 
prevention of disease, or for other peaceful purposes. 

(2) This Convention shall be implemented in a manner designed to 
avoid hampering the economic or technological development of States 
Parties to the Convention or international cooperation in the field of 
peaceful bacteriological (biological) activities, including the inter- 
national exchange of bacteriological (biological) agents and toxins 



79 

and equipment for the processing, use or production of bacteriological 
(biological) agents and toxins for peaceful purposes in accordance 
with the provisions of the Convention. 

ARTICLE XI 

Any State Party may propose amendments to this Convention. 
Amendments shall enter into force for each State Party accepting the 
amendments upon their acceptance by a majority of the States Parties 
to the Convention and thereafter for each remaining State Party on the 
date of acceptance by it. 

ARTICLE XII 

Five years after the entry into force of this Convention, or earlier if 
it is requested by a majority of Parties to the Convention by sub- 
mitting a proposal to this effect to the Depositary Governments, a con- 
ference of States Parties to the Convention shall be held at Geneva, 
Switzerland, to review the operation of the Convention, with a view to 
assuring that the purposes of the preamble and the provisions of the 
Convention, including the provisions concerning negotiations on chem- 
ical weapons, are being realized. Such review shall take into account 
any new scientific and technological developments relevant to the 
Convention. 

ARTICLE XIII 

( 1 ) This Convention shall be of unlimited duration. 

(2) Each State Party to this Convention shall in exercising its 
national sovereignty have the right to withdraw from the Convention 
if it decides that extraordinary events, related to the subject matter 
of the Convention, have jeopardized the supreme interests of its coun- 
try. It shall give notice of such withdrawal to all other States Parties 
to the Convention and to the L T nited Nations Security Council three 
months in advance. Such notice shall include a statement of the extra- 
ordinary events it regards as having jeopardized its supreme interests. 

ARTICLE XIV 

(1) This Convention shall be open to all States for signature. Any 
State which does not sign the Convention before its entry into force in 
accordance with paragraph (3) of this Article may accede to it at any 
time. 

(2) This Convention shall be subiect to ratification by signatory 
States. Instruments of ratification and instruments of accession shall be 
deposited with the Governments of the United States of America, the 
United Kingdom of Great Britain and Northern Ireland and the 
Union of Soviet Socialist Republics, which are hereby designated the 
Depositary Governments. 

(3) This Convention shall enter into force after the deposit of 
instruments of ratification by twenty-two Governments, including the 
Governments designated as Depositaries of the Convention. 

(4)^ For States whose instruments of ratification or accession are 
deposited subsequent to the entry into force of this Convention, it shall 



80 

enter into force on the date of the deposit of their instruments of ratifi- 
cation ou accession. 

(5) The Depositary Governments shall promptly inform all signa- 
tory and acceding States of the date of each signature, the date of 
deposit of each instrument of ratification or of accession and the date 
of the entry into force of this Convention, and of the receipt of other 
notices. 

(6) This Convention shall be registered by the Depositary Govern- 
ments pursuant to Article 102 of the Charter of the United Nations. 

ARTICLE XV 

This Convention, the English, Russian, French, Spanish and Chinese 
texts of which are equally authentic, shall be deposited in the archives 
of the Depositary Governments. Duly certified copies of the Conven- 
tion shall be transmitted by the Depositary Governments to the Gov- 
ernments of the signatory and acceding States. 



i. The Antarctic Treaty 1 

Signed at Washington, D.C. December 1, 1959; U.S. ratification deposited 
August 18, 1960; entered into force June 23, 1961 

The Governments of Argentina, Australia, Belgium, Chile, the 
French Republic, Japan, New Zealand, Norway, the Union of South 
Africa, the Union of Soviet Socialist Republics, the United Kingdom 
of Great Britain and Northern Ireland, and the United States of 
America, 

Recognizing that it is in the interest of all mankind that Antarctica 
shall continue forever to be used exclusively for peaceful purposes and 
shall not become the scene or object of international discord ; 

Acknowledging the substantial contributions to scientific knowledge 
resulting from international cooperation in scientific investigation in 
Antarctica ; 

Convinced that the establishment of a firm foundation for the con- 
tinuation and development of such cooperation on the basis of freedom 
of scientific investigation in Antarctica as applied during the Inter- 
national Geophysical Year accords with the interests of science and the 
progress of all mankind ; 

Convinced also that a treaty ensuring the use of Antarctica for peace- 
ful purposes only and the continuance of international harmony in 
Antarctica will further the purposes and principles embodied in the 
Charter of the United Nations ; 

Have agreed as follows : 

Article I 

1. Antarctica shall be used for peaceful purposes only. There shall be 
prohibited, inter alia, any measures of a military nature, such as the 
establishment of military bases and fortifications, the carrying out of 
military maneuvers, as well as the testing of any type of weapons. 

2. The present Treaty shall not prevent the use of military personnel 
or equipment for scientific research or for any other peaceful purpose. 

Article II 

Freedom of scientific investigation in Antarctica and cooperation 
toward that end, as applied during the International Geophysical Year, 
shall continue, subject to the provisions of the present Treaty. 

Article III 

1. In order to promote international cooperation in scientific investi- 
gation in Antarctica, as provided for in Article II of the present 

1 12 UST 794 ; TIAS 4780 ; 402 UNTS 71. For a list of states which are parties to this 
Treaty, see Dept. of State, publication, Treaties in Force. 

(81) 



82 

Treaty, the Contracting Parties agree that, to the greatest extent feasi- 
ble and practicable : 

(a) information regarding plans for scientific programs in 
Antarctica shall be exchanged to permit maximum economy and 
efficiency of operations ; 

(b) scientific personnel shall be exchanged in Antarctica 
between expeditions and stations ; 

(c) scientific observations and results from Antarctica shall be 
exchanged and made freely available. 

2. In implementing this Article, every encouragement shall be given 
to the establishment of cooperative working relations with those Spe- 
cialized Agencies of the United Nations and other international or- 
ganizations having a scientific or technical interest in Antarctica. 

Article IV 

1. Nothing contained in the present Treaty shall be interpreted as : 

(a) a renunciation by any Contracting Party of previously 
asserted rights of or claims to territorial sovereignty in 
Antarctica ; 

(b) a renunciation or diminution by any Contracting Party of 
any basis of claim to territorial sovereignty in Antarctica which it 
may have whether as a result of its activities or those of its na- 
tionals in Antarctica, or otherwise ; 

(c) prejudicing the position of any Contracting Party as re- 
gards its recognition or non-recognition of any other State's 
right of or claim or basis of claim to territorial sovereignty in 
Antarctica. 

2. No acts or activities taking place while the present Treaty is in 
force shall constitute a basis for asserting, supporting or denying a 
claim to territorial sovereignty in Antarctica or create any rights of 
sovereignty in Antarctica. No new claim, or enlargement of an exist- 
ing claim, to territorial sovereignty in Antarctica shall be asserted 
while the present Treaty is in force. 

Article V 

1. Any nuclear explosions in Antarctica and the disposal there of 
radioactive waste material shall be prohibited. 

2. In the event of the conclusion of international agreements con- 
cerning the use of nuclear energy, including nuclear explosions and 
the disposal of radioactive waste material, to which all of the Con- 
tracting Parties whose representatives are entitled to participate in 
the meetings provided for under Article IX are parties, the rules 
established under such agreements shall apply in Antarctica. 

Article VI 

The provisions of the present Treaty shall apply to the area south 
of 60° South Latitude, including all ice shelves, but nothing in the 
present Treaty shall prejudice or in any way affect the rights, or the 
exercise of the rights, of any State under international law with regard 
to the high seas within that area. 



83 

Article VII 

1. In order to promote the objectives and ensure the observance of 
the provisions of the present Treaty, each Contracting Party whose 
representatives are entitled to participate in the meetings referred to in 
Article IX of the Treaty shall have the right to designate observers to 
carry out any inspection provided for by the present Article. Observers 
shall be nationals of the Contracting Parties which designate them. 
The names of observers shall be communicated to every other Con- 
tracting Party having the right to designate observers, and like notice 
shall be given of the termination of their appointment. 

2. Each observer designated in accordance with the provisions of 
paragraph 1 of this Article shall have complete freedom of access at 
any time to any or all areas of Antarctica. 

3. All areas of Antarctica, including all stations, installations and 
equipment within those areas, and all ships and aircraft at points of 
discharging or embarking cargoes or personnel in Antarctica, shall be 
open at all times to inspection by any observers designated in accord- 
ance with paragraph 1 of this Article. 

4. Aerial observation may be carried out at any time over any or all 
areas of Antarctica by any of the Contracting Parties having the right 
to designate observers. 

5. Each Contracting Party shall, at the time when the present Treaty 
enters into force for it, inform the other Contracting Parties, and 
thereafter shall give them notice in advance, of 

(a) all expeditions to and within Antarctica, on the part of 
its ships or nationals, and all expeditions to Antarctica organized 
in or proceeding from its territory ; 

(b) all stations in Antarctica occupied by its nationals; and 

(c) any military personnel or equipment intended to be intro- 
duced by it into Antarctica subject to the conditions prescribed in 
paragraph 2 of Article I of the present Treaty. 

Article VIII 

1. In order to facilitate the exercise of their functions under the 
present Treaty, and without prejudice to the respective positions of 
Contracting Parties relating to jurisdiction over all other persons in 
Antarctica, observers designated under paragraph 1 of Article VII 
and scientific personnel exchanged under subparagraph 1(b) of Arti- 
cle III of the Treaty, and members of the staffs accompanying any 
such persons, shall be subject only to the jurisdiction of the Contract- 
ing Party of which they are nationals in respect to all acts or omissions 
occurring while they are in Antarctica for the purpose of exercising 
their functions. 

2. Without prejudice to the provisions of paragraph 1 of this Article, 
and pending the adoption of measures in pursuance of subparagraph 
1(e) of Article IX, the Contracting Parties concerned in any case of 
dispute with regard to the exercise of jurisdiction in Antarctica shall 
immediately consult together with a view to reaching a mutually 
acceptable solution. 



84 

Article IX 

1. Representatives of the Contracting Parties named in the preamble 
to the present Treaty shall meet at the City of Canberra within two 
months after the date of entry into force of the Treaty, and there- 
after at suitable intervals and places, for the purpose of exchanging 
information, consulting together on matters of common interest per- 
taining to Antarctica, and formulating and considering, and recom- 
mending to their Governments, measures in furtherance of the prin- 
ciples and objectives of the Treaty, including measures regarding : 

(a) use of Antarctica for peaceful purposes only ; 

(b) facilitation of scientific research in Antarctica ; 

(c) facilitation of international scientific cooperation an Ant- 
arctica ; 

(d) facilitation of the exercise of the rights of inspection pro- 
vided for in Article VII of the Treaty ; 

(e) questions relating to the exercise of jurisdiction in 
Antarctica ; 

(f) preservation and conservation of living resources in 
Antarctica. 

2. Each Contracting Party which has become a party to the present 
Treaty by accession under Article XIII shall be entitled to appoint 
representatives to participate in the meetings referred to in para- 
graph 1 of the present Article, during such time as that Contracting 
Party demonstrates its interest in Antarctica by conducting sub- 
stantial scientific research activity there, such as the establishment of 
a scientific station or the despatch of a scientific expedition. 

3. Reports from the observers referred to in Article VII of the 
present Treaty shall be transmitted to the representatives of the Con- 
tracting Parties participating in the meetings referred to in para- 
graph 1 of the present Article. 

4. The measures referred to in paragraph 1 of this Article shall 
become effective when approved by all the Contracting Parties whose 
representatives were entitled to participate in the meetings held to 
consider those measures. 

5. Any or all of the rights established in the present Treaty may be 
exercised as from the date of entry into force of the Treaty whether 
or not any measures facilitating the exercise of such rights have been 
proposed, considered or approved as provided in this Article. 

Article X 

Each of the Contracting Parties undertakes to exert appropriate 
efforts, consistent with the Charter of the United Nations, to the end 
that no one engages in any activity in Antarctica contrary to the prin- 
ciples or purposes of the present Treaty. 

Article XI 

1. If any dispute arises between two or more of the Contracting 
Parties concerning the interpretation or application of the present 
Treaty, those Contracting Parties shall consult among themselves with 
a view to having the dispute resolved by negotiation, inquiry, media- 



85 

tion, conciliation, arbitration, judicial settlement or other peaceful 
means of their own choice. 

2. Any dispute of this character not so resolved shall, with the con- 
sent, in each case, of all parties to the dispute, be referred to the Inter- 
national Court of Justice for settlement; but failure to reach agree- 
ment on reference to the International Court shall not absolve parties 
to the dispute from the responsibility of continuing to seek to resolve it 
by any of the various peaceful means referred to in paragraph 1 of 
this Article. 

Article XII 

1. (a) The present Treaty may be modified or amended at any time 
by unanimous agreement of the Contracting Parties whose representa- 
tives are entitled to participate in the meetings provided for under 
Article IX. Any such modification or amendment shall enter into 
force when the depositary Government has received notice from all 
such Contracting Parties that they have ratified it. 

(b) Such modification or amendment shall thereafter enter into 
force as to any other Contracting Party when notice of ratification by 
it has been received by the depositary Government. Any such Con- 
tracting Party from which no notice of ratification is received within 
a period of two years from the date of entry into force of the modi- 
fication or amendment in accordance^ with the provisions of subpara- 
graph 1 (a) of this Article shall be deemed to have withdrawn from the 
present Treaty on the date of expiration of such period. 

2. (a) If after the expiration of thirty years from the date of entry 
into force of the present Treaty, any of the Contracting Parties whose 
representatives are entitled to participate in the meetings provided for 
under Article IX so requests by a communication addressed to the de- 
positary Government, a Conference of all the Contracting Parties 
shall be held as soon as practicable to review the operation of the 
Treaty. 

(b) Any modification or amendment to the present Treaty which is 
approved at such a Conference by a majority of the Contracting Par- 
ties there represented, including a majority of those whose representa- 
tives are entitled to participate in the meetings provided for under 
Article IX. shall be communicated by the depositary Government to 
all the Contracting Parties immediately after the termination of the 
Conference and shall enter into force in accordance with the provi- 
sions of paragraph 1 of the present Article. 

(c) If any such modification or amendment has not entered into 
force in accordance with the provisions of subparagraph 1(a) of this 
Article within a period of two years after the date of its communica- 
tion to all the Contracting Parties, any Contracting Party may at any 
time after the expiration of that period give notice to the depositary 
Government of its withdrawal from the present Treaty; and such 
withdrawal shall take effect two years after the receipt of the notice 
by the depositary Government. 

Article XIII 

1. The present Treaty shall be subject to ratification by the signa- 
tory States. It shall be open for accession by any State which is a 




86 

Member of the United Nations, or by any other State which may be 
invited to accede to the Treaty with the consent of all the Contract- 
ing Parties whose representatives are entitled to participate in the 
meetings provided for under Article IX of the Treaty. 

2. Ratification of or accession to the present Treaty shall be effected 
by each State in accordance with its constitutional processes. 

3. Instruments of ratification and instruments of accession shall be 
deposited with the Government of the United States of America, 
hereby designated as the depositary Government. 

4. The depositary Government shall inform all signatory and acced- 
ing States of the date of each deposit of an instrument of ratification 
or accession, and the date of entry into force of the Treaty and of any 
modification or amendment thereto. 

5. Upon the deposit of instruments of ratification by all the signa- 
tory States, the present Treaty shall enter into force for those States 
and for States which have deposited instruments of accession. There- 
after the Treaty shall enter into force for any acceding State upon the 
deposit of its instrument of accession. 

6. The present Treaty shall be registered by the depositary Govern- 
ment pursuant to Article 102 of the Charter of the United Nations. 

Article XIV 

The present Treaty, done in the English, French, Russian and Span- 
ish languages, each version being equally authentic, shall be deposited 
in the archives of the Government of the United States of America, 
which shall transmit duly certified copies thereof to the Governments 
of the signatory and acceding States. 

In witness whereof, the undersigned Plenipotentiaries, duly auth- 
orized, have signed the present Treaty. 

Done at Washington this first day of December, one thousand nine 
hundred and fifty-nine. 



E. DEPARTMENT OF STATE 

CONTENTS 

1. State Department Procedures on Treaties and Other International Page 

Agreements (partial text of circular 175) 89 

2. Organization and Administration 104 

a. Responsibilities of Chiefs of U.S. Diplomatic Missions 104 

b. Interdepartmental Operations of the U.S. Government Overseas. 106 

(1) The National Security Council System (Presidential 

Directive/NSC-2) 106 

3. Passport Regulations 109 

a. Regulations of the Secretary of State, as amended (Subjects: 

Nationality Procedures, Passports, Marriage, Travel Control 

in Time of War or National Emergency) 109 

b. Presidential Proclamation 3004 (Control of Persons Leaving or 

Entering the United States) 135 

4. Regulations of the Secretary of State (Acceptance of Gifts and Decora- 

tions From Foreign Governments) 138 

5. Migration and Refugee Assistance 141 

a. Protocol Relating to the Status of Refugees (with reservation) _ 141 

b. Convention Relating to the Status of Refugees 145 



(87) 



I 



1. State Department Procedures on Treaties and Other Inter- 
national Agreements; partial text Circular 175 dated October 
25, 1974, 11 FAM 700 

710 PURPOSE 

a. The purpose of this chapter is to facilitate the application of 
orderly and uniform measures and procedures the negotiation, signa- 
ture, publication, and registration of treaties and other international 
agreements of the United States. It is also designed to facilitate the 
maintenance of complete and accurate records on treaties and agree- 
ments and the publication of authoritative information regarding 
them. 

b. The chapter is not a catalog of all the essential guidelines or 
information pertaining to the making and application of international 
agreements. It is limited to guidelines or information necessary for 
general guidance. 

711 Disclaimer 

This chapter is intended solely as a general outline of measures and 
procedures ordinarily followed which, it is recognized, cannot antici- 
pate all circumstances or situations that may arise. Deviation or 
derogation from the provisions of this chapter will not invalidate 
actions taken by officers nor affect the validity of negotiations engaged 
in or of treaties or other agreements concluded. 1 

720 NEGO TIA TION AND SIGNATURE 

720.1 Circular 175 Procedure 

This subchapter is a codification of the substance of Department 
Circular No. 175, December 13, 1955, as amended, on thp negotiation 
and signature of treaties and other international agreements. It may 
be referred to for convenience and continuity as the "Circular 175 
Procedure." 

720.2 General Objectives 
The objectives are : 

a. That the making of treaties and other international agreements 
for the United States is carried out within constitutional and other 
appropriate limits ; 

b. That the objectives to be sought in the negotiation of particular 
treaties and other international agreements are approved by the Secre- 
tary or an officer specifically authorized by him for that purpose ; 

t c. That timely and appropriate consultation is had with congres- 
sional leaders and committees on treaties and other international 
agreements ; 
d. That where, in the opinion of the Secretary of State or his 

1 Deleted material may be found in the following published source : Rovine, Arthur W. 
Digest of United States Practice in International Laic, jgy^, Washington, D.C., U.S. 
Government Printing Office, 1975, pp. 199-215. 

(89) 



»n.nw n 



90 

designee, the circumstances permit, the public be given an opportunity 
to comment on treaties and other international agreements; 

e. That firm positions departing from authorized positions are not 
undertaken without the approval of the Legal Adviser and interested 
assistant secretaries or their deputies ; 

f . That the final texts developed are approved by the Legal Adviser 
and the interested assistant secretaries or their deputies and, when 
required, brought a reasonable time before signature to the attention 
of the Secretary or an officer specifically designated by him for that 
purpose ; 

g. That authorization to sign the final text is obtained and appro- 
priate arrangements for signature are made ; 

h. That there is compliance with the requirements of Public Law 
92-403 on the transmission of the texts of international agreements 
other than treaties to the Congress (see section 724) ; the law on the 
publication of treaties and other international agreements (see section 
725) ; and treaty provisions on registration (see section 750.3-3). 

721 Exercise of the International Agreement Power 

721.1 Determination of Type of Agreement 

The following considerations will be taken into account along with 
other relevant factors in determining whether an international agree- 
ment shall be dealt with by the United States as a treaty to be brought 
into force with the advice and consent of the Senate, or as an agree- 
ment to be brought into force on some other constitutional basis. 

721.2 Constitutional Requirements 

There are two procedures under the Constitution through which the 
United States becomes a party to international agreements. Those pro- 
cedures and the constitutional parameters of each are : 

a. Treaties 

International agreements (regardless of their title ; designation, or 
form) whose entry into force with respect to the United States takes 
place only after the Senate has given its advice and consent are 
"treaties." The President, with the advice and consent of two-thirds 
of the Senators present, may enter into an international agreement on 
any subject genuinely of concern in foreign relations, so long as the 
agreement does not contravene the United States Constitution; and 

b. International Agreements Other Than Treaties 

International agreements brought into force with respect to the 
United States on a constitutional basis other than with the advice and 
consent of the Senate are "international agreements other than 
treaties." (The term "executive agreement" is appropriately reserved 
for agreements made solely on the basis of the constitutional authority 
of the President.) There are three constitutional bases for interna- 
tional agreements other than treaties as set forth below. An interna- 
tional agreement may be concluded pursuant to one or more of these 
constitutional bases : 

(1) Agreements Pursuant to Treaty 
The President may conclude an international agreement pursuant to 
a treaty brought into force with the advice and consent of the Senate, 
whose provisions constitute authorization for the agreement by the 
Executive without subsequent action by the Congress; 



91 

(2) Agreements Pursuant to Legislation 

The President may conclude an international agreement on the basis 
of existing legislation or subject to legislation to be enacted by the 
Congress; and 

(3) Agreements Pursuant to the Constitutional Authority of 

the President 
The President may conclude an international agreement on any sub- 
ject within his constitutional authority so long as the agreement is 
not inconsistent with legislation enacted by the Congress in the exer- 
cise of its constitutional authority. The constitutional authority for 
the President to conclude international agreements include : 

(a) The President's authority as Chief Executive to represent the 
nation in foreign affairs ; 

(b) The President's authority to receive ambassadors and other 
public ministers; 

(c) The President's authority as "Commander-in-Chief"; and 

(d) The President's authority to "take care that the laws be faith- 
fully executed." 

721 $ Considerations for Selecting Among Constitutionally Author- 
ized Procedures 
In determining a question as to the procedure which should be fol- 
lowed for any particular international agreement, due consideration is 
given to the following factors along with those in section 721.2: 

a. The extent to which the agreement involves commitments or risks 
affecting the nation as a whole ; 

b. Whether the agreement is intended to affect State laws ; 

c. Whether the agreement can be given effect without the enact- 
ment of subsequent legislation by the Congress ; 

d. Past United States practice with respect to similar agreements; 

e. The preference of the Congress with respect to a particular type 
of agreement ; 

f. The degree of formality desired for an agreement ; 

g. The proposed duration of the agreement, the need for prompt 
conclusion of an agreement, and the desirability of concluding a 
routine or short -term agreement ; and 

h. The general international practice with respect to similar agree- 
ments. 

In determining whether any international agreement should be 
brought into force as a treaty or as an international agreement other 
than a treaty, the utmost care is to be exercised to avoid any invasion 
or compromise of the constitutional powers of the Senate, the Con- 
gress as a whole, or the President. 

7214 Questions as to Type of Agreement To Be Used; Consultation 
With Congress 

a. All legal memorandums accompanying Circular 175 requests 
(see section 722.3e) will discuss thoroughly the bases for the type of 
agreement recommended. 

b. When there is any question whether an international agreement 
should be concluded as a treaty or as an international agreement other 
than a treaty, the matter is brought to the attention of the Legal 
Adviser of the Department. If the Legal Adviser considers the 
question to be a serious one that may warrant congressional consul- 



92 

tation, a memorandum will be transmitted to the Assistant Secretary 
for Congressional Relations and other officers concerned. Upon re- 
ceiving, their views on the subject, the Legal Adviser shall, if the 
matter has not been resolved, transmit a memorandum thereon to the 
Secretary for his decision. Every practicable effort will be made to 
identify such questions at the earliest possible date so that consulta- 
tions may be completed in sufficient time to avoid last-minute 
consideration. 

c. Consultations on such questions will be held with congressional 
leaders and committees as may be appropriate. Arrangements for such 
consultations shall be made by the Assistant Secretary for Con- 
gressional Relations and shall be held with the assistance of the 
Office of the Legal Adviser and such other offices as may be determined. 
Nothing in this section shall be taken as derogating from the require- 
ment of appropriate consultations with the Congress in accordance 
with section 723.1e in connection with the initiation of, and develop- 
ments during, negotiations for international agreements, particularly 
where the agreements are of special interest to the Congress. 

722 Action Required in Negotiation and/ or Signature of Treaties 
and Agreements 

722.1 Authorization Required To Undertake Negotiations 

Negotiations of treaties, or other international agreements on mat- 
ters of substance, or for their extension or revision are not to be under- 
taken, nor any exploratory discussions undertaken with representatives 
of another government, until authorized in writing by the Secretary 
or an officer specifically authorized by him for that purpose. Notifica- 
tion of termination of any treaty or other international agreement on 
matters of substance requires similar authorization. 

722S Scope of Authorization 

Approval of a request for authorization to negotiate a treaty or other 
international agreement does not constitute advance approval of the 
text nor authorization to agree upon a date for signature or to sign 
the treaty or agreement. Authorization to agree upon a given date for, 
and to proceed with, signature must be specifically requested in writ- 
ing, as provided in section 722.3. This applies to treaties and other 
agreements to be signed abroad as well as those to be signed at Wash- 
ington. Special instructions may be required, because of the special 
circumstances involved, with respect to multilateral conventions or 
agreements to be signed at international conferences. 

722.3 Request for Authorization To Negotiate and/or Sign; Action 
Memorandum 
a. A request for authorization to negotiate and/or sign a treaty or 
other international agreement takes the form of an action memoran- 
dum addressed to the Secretary and cleared with the Office of the Legal- 
Adviser, the Office of the Assistant Secretary for Congressional Rela- 
tions, other appropriate bureaus, and any other agency (such as 
Defense, Commerce, etc.) which has primary responsibility or a sub- 
stantial interest in the subject matter. It is submitted through the 
Executive Secretariat. 



93 

b. The action memorandum may request one of the following: (1) 
authority to negotiate, (2) authority to sign, or (3) authority to 
negotiate and sign. The request in each instance states that any sub- 
stantive changes in the draft text will be cleared with the Office of 
the Legal Adviser and other specified regional and/or functional 
bureaus before definitive agreement is reached. Drafting offices con- 
sult closely with the Office of the Legal Adviser to insure that all legal 
requirements are met. 

c. The action memorandum indicates what arrangements are planned 
with respect to (1) congressional consultation, and (2) opportunity 
for public comment on the treaty or agreement being negotiated, 
signed, or acceded to. 

d. 'Where it appears that there may be obstacles to the immediate 
public disclosure of the text upon its entry into force, the action 
memorandum shall include an explanation thereof (see sections 723.2 
and 723.3). 

e. The action memorandum is accompanied by (1) the draft, if avail- 
able, of any agreement or other instrument intended to be negotiated, 
(2) the text of any agreement and related exchange of notes, agreed 
minutes or other document to be signed, and (3) a memorandum of 
law prepared in the Office of the Legal Adviser. 

7224 Separate Authorizations 

When authorization is sought with respect to a particular treaty or 
other agreement, either multilateral or bilateral, the action memoran- 
dum for this purpose outlines briefly and clearly the principal features 
of the proposed treaty or other agreement, indicates any special prob- 
lems which may be encountered and, if possible, the contemplated 
solutions of those problems. 

722.5 Blanket Authorizations 

In general, blanket authorizations are appropriate only in those 
instances where, in carrying out or giving effect to provisions of law or 
policy decisions, a series of agreements of the same general type is 
contemplated: that is, a number of agreements to be negotiated ac- 
cording to a more or less standard formula (for example, Public Law 
480 Agricultural Commodities Agreements; Educational Exchanges 
Agreements: Investment Guaranty Agreements; Weather Station 
Agreements, etc.) or a number of treaties to be negotiated according 
to a more or less standard formula (for example, consular conventions, 
extradition treaties, etc.). Each request for blanket authorization shall 
specify the office or officers to whom the authority is to be delegated. 
The basic precepts under section 722.3 and 722.4 apply equally to re- 
quests for blanket authorizations. 

722.6 Certificate on Foreign-Language Text 

a. Before any treaty or other agreement containing a foreign-lan- 
guage text is laid before the Secretary (or any person authorized by 
the Secretary) for signature, either in the Department or at a post, a 
sigrned memorandum must be obtained from a responsible language 
officer of the Department certifying that the foreign-language text and 
the English-language text are in conformity with each other and that 
both texts have the same meaning in all substantive respects. A similar 



94 

certification must be obtained for exchanges of notes that set forth the 
terms of an agreement in two languages. 

b. In exceptional circumstances the Department can authorize the 
certification to be made at a post. 

722.7 Transmission of Texts to the Secretary 

The texts of treaties and other international agreements must be 
completed and approved in writing by all responsible officers con- 
cerned sufficiently in advance to give the Secretary, or the person to 
whom authority to approve the text had been delegated, adequate time 
before the date of signing to examine the text and dispose of any ques- 
tions that arise. Posts must transmit the texts to the Department as 
expeditiously as feasible to assure adequate time for such considera- 
tion. Except as otherwise specifically authorized by the Secretary, a 
complete text of a treaty or other international agreement must be 
delivered to the Secretary, or other person authorized to approve the 
text, before any such text is agreed upon as final or any date is agreed 
upon for its signature. 

723 Responsibility of Office or Officer Conducting Negotiations 
723.1 Conduct of Negotiations 
The office or officer responsible for any negotiations keeps in mind : 

a. That during the negotiations no position is communicated to a 
foreign government or to an international organization as a U.S. posi- 
tion that goes beyond any existing authorization or instructions ; 

b. That no proposal is made or position is agreed to beyond the 
original authorization without appropriate clearance (see section 
722.3a) ; 

c. That all significant policy-determining memorandums and in- 
structions to the field on the subject of the negotiations have appro- 
priate clearance (see section 722.3a) ; 

d. That the Secretary is kept informed in writing of important policy 
decisions and developments, including any particularly significant de- 
partures from substantially standard drafts that have been evolved; 

e. That with the advice and assistance of the Assistant Secretary 
for Congressional Relations, the appropriate congressional leaders and 
committees are advised of the intention to negotiate significant new 
international agreements, consulted concerning such agreements, and 
kept informed of developments affecting them, including especially 
whether any legislation is considered necessary or desirable for the 
implementation of the new treaty or agreement. Where the proposal 
for any especially important treaty or other international agreement 
is contemplated, the Office of the Assistant Secretary for Congressional 
Relations will be informed as early as possible by the office responsible 
for the subject ; 

f. That the interest of the public be taken into account and, where in . 
the opinion of the Secretary of State or his designee the circumstances 
permit, the public be given an opportunity to comment : 

g. That in no case, after accord has been reached on the substance 
and wording of the texts to be signed, do the negotiators sign an 
agreement or exchange notes constituting an agreement until a request 
under section 722.3 for authorization to siitm has been approved and, 
if at a post abroad, until finally instructed by the Department to do 



95 

so as stated in section 730.3. If an agreement is to be signed in two 
languages, each language text must be cleared in full with the Lan- 
guage Services Division or, if at a post abroad, with the Department 
before signature, as stated in section 722.6 ; 

h. That due consideration is given also to the provisions of sections 
723.2 through 723.9, 730.3, and 731 of this chapter ; and 

i. That, in any case where any other department or agency is to 
play a primary oi significant role or has a major interest in negotia- 
tion of an international agreement, the appropriate official or officials 
in such department or agency are informed of the provisions of this 
subchapter. 

723.2 Avoiding Obstacles to Publication and Registration 

The necessity of avoiding any commitment incompatible with the 
law requiring publication (1 U.S.C. 112a) and with the treaty pro- 
visions requiring registration (see section 750.3-3) should be borne 
in mind by U.S. negotiators. Although negotiations may be conducted 
on a confidential basis, every practicable effort must be made to 
assure that any definitive agreement or commitment entered into will 
be devoid of any aspect which would prevent the publication and 
registration of the agreement. 

723.3 Questions on Immediate Public Disclosure 

In any instance where it appears to the officer or office in the De- 
partment responsible for the negotiations or to the U.S. representa- 
tives that the immediate public disclosure upon its entry into force 
of an agreement under negotiation would be prejudical to the na- 
tional security of the United States, the pertinent circumstances shall 
be reported to the Secretary of State and his decision awaited before 
any further action is taken. Where such circumstances are known 
before authorization to negotiate or to sign is requested, they shall 
be included in the request for authorization. All such reports and re- 
quests are to be cleared with the Office of the Legal Adviser. 

7234 Public Statements 

No public statement is to be made indicating that agreement on a 
text has been reached, or that negotiations have been successfully 
completed, before authorization is granted to sign the treaty or other 
agreement. If such authorization has been granted subject to a con- 
dition that no substantive change in the proposed text is made with- 
out appropriate clearance (see section 722.3a), no such public state- 
ment is to be made until definitive agreement on the text has been 
reached and such clearance has been received. Normally, such a public 
statement is made only at the time a treaty or other agreement is 
actually signed, inasmuch as it remains possible that last-minute 
changes will be made in the text. Any such statement prior to that 
time must have the appropriate clearance, and the approval of the 
Secretary or the Department principal who originally approved the 
action memorandum request under "Circular 175 Procedure." 

******* 
723.7 Transmission of Certified Copies to the Department 

When an exchange of diplomatic notes between the mission and 
a foreign government constitutes an agreement or has the effect of 



96 

extending, modifying, or terminating an agreement to which the 
United States is a party, a properly certified copy of the note from 
the mission to the foreign government, and the signed original of the 
note from the foreign government, are sent, as soon as practicable 
to the Department for the attention of the Assistant Legal Adviser for 
Treaty Affairs. The transmittal is by airgram, not by transmittal 
slip or operations memorandum. 

Likewise, if, in addition to the treaty or other agreement signed, 
notes related thereto are exchanged (either at the same time, before- 
hand, or thereafter), a properly certified copy (copies) of the note(s) 
from the mission to the foreign government are transmitted with the 
signed original (s) of the note(s) from the foreign government. 

In each instance, the mission retains for its files certified copies of 
the note exchanged. The U.S. note is prepared in accordance with 
the rules prescribed in the Correspondence Handbook. The note of 
the foreign government is prepared in accordance with the style of 
the foreign office and usually in the language of that country. When- 
ever practicable, arrangements are made for the notes to bear the 
same date. 

****** * 

724 Transmission of International Agreements Other Than Treaties 

to Congress; Compliance With Public Law 92-403 
All officers will be especially diligent in cooperating to assure com- 
pliance with Public Law 92-403 "An Act To require that interna- 
tional agreements other than treaties, hereafter entered into by the 
United States, be transmitted to the Congress within sixty days after 
the execution thereof." That Act, approved August 22, 1972 (86 Stat. 
619 ; 1 U.S.C. 112b) , provides as follows : 

"The Secretary of State shall transmit to the Congress the 
text of any international agreement other than a treaty, to which 
the United States is a party as soon as practicable after such 
agreement has entered into force with respect to the United States 
but in no event later than sixty days thereafter. However, any 
such agreement the immediate public disclosure of which would, 
in the opinion of the President, be prejudicial to the national 
security of the United States shall not be so transmitted to the 
Congress but shall be transmitted to the Committee on Foreign 
Relations of the Senate and the Committee on Foreign Affairs 
of the House of Representatives under an appropriate injunction 
of secrecy to be removed only upon due notice from the President." 

725 Publication of Treaties and Other International Agreements of 

the United States 
The attention of all officers is directed to the requirements of the 
Act of September 23, 1950 (64 Stat. 979; 1 U.S.C. 112a), which pro- 
vides as follows : 

"The Secretary of State shall cause to be compiled, edited, in- 
dexed, and published, beginning as of January 1, 1950, a compila- 
tion entitled 'United States Treaties and Other International 
Agreements,' which shall contain all treaties to which the United 
States is a party that have been proclaimed during each calendar 
year, and all international agreements other than treaties to which 



97 

the United States is a party that have been signed, proclaimed, 
or with reference to which any other final formality has been 
executed, during each calendar year. The said United States 
Treaties and Other International Agreements shall be legal evi- 
dence of the treaties, international agreements other than treaties, 
and proclamations by the President of such treaties and agree- 
ments, therein contained, in all the courts of the United States, 
the several States, and the Territories and insular possessions of 
the United States." 
730 GUIDELINES FOR CONCLUDING INTERNATIONAL 
AGREEMENTS 

730.1 Method of Concluding Bilateral and Multilateral Agreements 
An agreement may be concluded (entered into) ^ by the process of 
bilateral negotiations which result either in the signing of a single 
instrument in duplicate or in exchange of diplomatic notes,or by the 
process of multilateral negotiations, usually at an international con- 
ference to which the governments concerned send official delegations 
for the purpose of formulating and signing an instrument of 
agreement. 



730.3 Instructions to Negotiators 

When an agreement is to he concluded at a foreign capital, the De- 
partment designates the American negotiator or negotiators, and the 
negotiator or negotiators are given appropriate instructions. If the 
agreement to be negotiated is a treaty which will be referred to the 
Senate, the Secretary of State may at some time prior to or during 
the negotiations issue or request the President to issue a "full power" 
(see section 732) constituting formal authorization for the American 
negotiators to sign the agreement. Such a "full power" is not custom- 
ary with respect to an international agreement other than a treaty. 
The receipt or possession of a "full power" is never to be considered 
as a final authorization to sign. That authorization is given by the 
Department by a written or telegraphic instruction, and no signature 
is affixed in the absence of such instruction. If the proposal for an 
agreement originates with the United States, the American negotiators 
as a rule furnish a tentative draft of the proposed agreement for sub- 
mission to the other government for its consideration. The negotia- 
tors submit to the Department any modification of the draft or any 
counterproposal made by the other government and await instructions 
from the Department. If the original proposal emanates from a foreign 
government, the mission forwards the proposal to the Department and 
awaits its instructions. 



734 Exchange of Ratifications 

734- .1 Time and Place for Exchange 

It is customary for a treaty to contain a simple provision to the effect 
that the instruments of ratification shall be exchanged at a designated 
capital, and that the treaty shall enter into force on the date of such 
exchange or at the expiration of a specified number of days or months 



98 

following the date of exchange. As all treaties signed on the part of 
the United States are subject to ratification by and with the advice 
and consent of the Senate, and as the time required for action on any 
particular treaty cannot be foreseen, it is preferable that provision is 
made in the treaty that the instruments of ratification are to be ex- 
changed "as soon as possible" rather than within a specified period. 

734£ Effecting the Exchange 

In exchanging instruments of ratification the representative of the 
United States hands to the representative of the foreign government 
a duplicate original of the President's instrument of ratification. In 
return, the representative of the foreign government hands to the rep- 
resentative of the United States the instrument of ratification executed 
by the head or the chief executive of the foreign government. A proto- 
col, sometimes called pro ce s-verbal or "Protocol of Exchange of Ratifi- 
cations," attesting the exchange is signed by the two representatives 
when the exchange is made. No full power is required for this pur- 
pose. The protocol of exchange is signed in duplicate originals, one for 
each government, and the principle of the alternat is observed as in the 
treaty. Before making the exchange and signing the proces-verbal or 
protocol of exchange the diplomatic representative of the United 
States must be satisfied that the ratification of the foreign government 
is an unqualified ratification, or subject only to such reservations or 
understandings as have been agreed to by the two governments. 

73Ji,.3 Notification of Date of Exchange 

In all cases, but particularly in those in which the treaty enters into 
force on the day of the exchange, it is essential that the mission notify 
the Department by telegram when arrangements have been completed 
for the exchange, and also when the exchange actually takes place. By 
the first pouch after the exchange takes place, if possible, the mission 
forwards to the Department the instrument of ratification of the 
foreign government and the U.S. Government's original of the signed 
proces-verbal or protocol of exchange. The Department then will take 
such steps as may be necessary to have the proclamation of the treaty 
executed by the President. 

740 MULTILATERAL TREATIES AND AGREEMENTS 
71fl.l General Procedures 

The procedures for the making of multilateral agreements are in 
many respects the same as those for the making of bilateral agree- 
ments; for example, the general requirements in regard to full powers, 
ratification, proclamation, and publication. This subchapter covers 
those procedures which are at variance with bilateral procedures. 

740.2 Negotiation 

740.2-1 Function of International Conference 

The international conference is the device usually employed for the 
negotiation of multilateral agreements. The greater the number of 
countries involved, the greater the necessity for such a conference. If 
only three or four countries are involved, it may be convenient to carry 
on the preliminary negotiations through correspondence and have a 
joint meeting of plenipotentiaries to complete the negotiations and to 
sign the document. 



99 

7W.2-2 Invitation 

Traditionnllv. the international conference was convened bv one 
fifovernments extending to other interested governments an invitation 
(acceptance usually assured beforehand) to participate, the host gov- 
ernment bearing most, if not all. of the expense incident to the physical 
aspects of the conference. This is still often the practice, but increasing 
numbers of conferences have been convened under the auspices, and 
at the call, of international organizations. 

7^0.2-3 StMemen t o f Purpose 

TVTien a rail is made or invitations are extended for a conference for 
the formulation of a multilateral agreement, it is customary for a pre- 
cise statement of purpose to accompany the call or the invitations. 
Sometimes, the invitation is also accompanied by a draft agreement to 
be used as a basis for negotiations. If the conference is called under 
the auspices of an international organization, the precise statement of 
purpose or the draft agreement may be prepared in preliminary ses- 
sions of the organization or by the secretariat of the organization. 

71f0.2-b Instructions to Negotiators 

The U.S. delegation to a conference may he comprised of one or 
more representatives. As a rule, the U.S. delegation is furnished 
written instructions by the Department prior to the conference in the 
form of a position paper for the U.S. delegation cleared with the Secre- 
tary or an officer specifically authorized by him and other appropriate 
Department officers for that purpose, under the procedures described 
in section 722.3. The Office of the Le^ral Adviser in all instances reviews 
drafts of international conventions to be considered in meetings of an 
international organization of which the United States is a member: 
when necessary, it also provides legal assistance at international con- 
ferences and meetings. 

740.2S Fin al A rts of Conference 

The "Final Act'' of a conference must not contain international com- 
mitments. A Final Act must be limited to such matters as a statement 
or summary of the proceedings of the conference, the names of the 
states that participated, the organization of the conference and the 
committees established, resolutions adopted, the drafts of international 
agreements formulated for consideration by governments concerned, 
and the like. If an international agreement is to be opened for signa- 
ture at the close of the conference, a text thereof may be annexed to 
the Final Act but must not be incorporated in the body thereof ; the text 
to be signed must be prepared and bound separately for that purpose. 
Where a Final Act appears to embody international commitments, the 
U.S. representative reports the same to the Department and awaits 
specific instructions before taking any further action. 



7J$.2-2 A rrangcm en t of Nam es and Signatures 

The arrangement of names and signatures, although it may seem 
a minor matter, sometimes presents difficulties in the case of multi- 
lateral agreements. There may be variations of arrangements, depend- 
ing on particular factors, but the arrangement most generally used 
is alphabetical according to the names of the countries concerned. 



100 

An alphabetical listing, however, presents the further question, even 
when there are only two languages, of what language is to be used 
in determining the arrangement. It is a common practice to use the 
language of the host government or for an agreement formulated 
under the auspices of an international organization, to follow the prec- 
edents established by that organization. It is possible, in the event 
that agreement could not be reached regarding the arrangement of 
names of countries and signatures of plenipotentiaries, to have a draw- 
ing of lots, a device seldom used. In any event, the question is one 
to be determined by the conference. 

******* 

745 Disposition of Final Documents of Conference 

At the close of a conference, the remaining supply of working docu- 
ments (for example, records of committee meetings, verbatim minutes, 
etc.) usually is placed in the custody of the host government or the or- 
ganization which called the conference for appropriate disposition. 
It is not proper for definitive commitments constituting part of the 
agreement to be embodied in such working documents. Definitive com- 
mitments must be incorporated only in a final document to be signed 
or adopted as an international agreement. The final documents of the 
conference may include a Final Act (see section 740.2-5) and sepa- 
rately, the text(s) of agreement (s). The practice of signing a Final 
Act is still followed in many cases. In any event, any agreement for- 
mulated at the conference must be engrossed as a separate document 
and signed or adopted. The signed or adopted originals of the final 
documents of the conference are turned over to the government or in- 
ternational organization designated is such documents as depositary. 
If the conference is not held under the auspices of an organization, it is 
customary for the host government to be designated depositary, but it 
might be appropriate, even in such case, to name an organization, 
such as the United Nations, as depositary. The decision is made by the 
conference, with the concurrence of the government or international 
organization concerned. 

746 Procedure Following Signature 

746.1 Understandings or Reservations 

If it is necessary to inform other governments concerned, and per- 
haps obtain their consent, with respect to an understanding, interpre- 
tation, or reservation included by the Senate in its resolution of ad- 
vice and consent, this Government communicates with the depositary, 
which then carries on the necessary correspondence with the other 
governments concerned. 

746.2 Deposit of Ratification 

When the depositary for a multilateral agreement is a foreign 
government or an international organization, the U.S. instrument of 
ratification (or adherence, accession, acceptance, etc.) is sent by the" 
Department to the appropriate Foreign Service mission or to the 
U.S. representative to the organization if there is a permanent repre- 
sentative. The mission or the representative deposits it with the 
depositary authority in accordance with the terms of the accom- 
panying instruction from the Department concerning the time of 



101 

deposit. When this Government is depositary for a multilateral agree- 
ment, posts are not authorized to accept instruments of ratification 
of foreign governments; that is, the foreign government cannot de- 
posit its instrument with the post. If a post is requested to transmit 
an instrument of ratification to the Department, it must make clear 
to the foreign government that the post is acting only as a transmitting 
agent and that the ratification cannot be considered as accepted for 
deposit until received and examined by the Department. 

7Ifi.3 Registration 

(See also section 750.3-3) 

It is generally recognized that the depositary for a multilateral 
agreement has a primary responsibility for its registration. Normally, 
the depositary has custody not only of the original document of agree- 
ment but also of instruments of ratification and other formal docu- 
ments. Consequently, the depositary is the most authoritative source 
of information and documentation. 

750 RESPONSIBILITIES OF THE ASSISTANT LEGAL 

ADVISER FOR TREATY AFFAIRS 
750.1 Preparation of Documents, Ceremonies^ and Instructions 

Carrying out and providing advice and assistance respecting the 
provisions of this chapter are the responsibility of the Assistant Legal 
Adviser for Treaty Affairs, who : 

a. Reviews all drafts of international agreements, proposals by other 
governments or international organizations, instructions and position 
papers, all Circular 175 requests, and accompanying memorandums 
of law ; 

b. Makes all arrangements and supervises ceremonies at Washington 
for the signature of treaties or other international agreements; and 
prepares or arranges for the preparation of texts of treaties and other 
agreements to be signed at Washington : 

c. Prepares or arranges for preparation of the Secretary of State's 
reports to the President, and the President's messages to the Senate 
for transmission of treaties for advice and consent to ratification; 

d. Prepares instruments of ratification or adherence, instruments or 
notifications of acceptance or approval, termination notices, and 
proclamations with respect to treaties or other international 
agreements ; 

e. Makes arrangements for the exchange or deposit of instruments 
of ratification, the deposit of instruments of adherence, the receipt or 
deposit of instruments or notifications of acceptance or approval, and 
termination notices with respect to treaties or other international 
agreements ; 

f. Prepares instructions to posts abroad and notes to foreign 
diplomatic missions at Washington respecting matters stated in 
paragraph e; 

g. Takes all measures required for the transmission to the Congress 
of all international agreements other than treaties, as required by 
the Public Law 92-103 (see section 724). and the publication and 
registration of treaties and other international agreements to which 
the United States is a party (see sections 725 and 750.3-3). 



102 

750.3-1 Publication of Texts 

After the necessary action has been taken to bring into force the 
treaty or other international agreement concluded by the United 
States, it is published promptly in the Treaties and Other Interna- 
tional Act Series issued by the Department. After publication in that 
series, the text of the treaty or other agreement is printed in the annual 
volume (which may consist of two or more bindings) of United States 
Treaties and Other International Agreements, as required by law (see 
section 725). Treaties and other agreements concluded prior to Janu- 
ary 1, 1950, were published in the United States Statutes at Large. 

750.3-2 Responsibility for Other Treaty Publications 

The Office of the Assistant Legal Advisor for Treaty Affairs pre- 
pares and maintains the annual publication Treaties in Force, and 
authoritative guide to the text and status of treaties and other inter- 
national agreements currently in force for the United States. It also 
compiles and has published, in addition to the text referred to in sec- 
tion 750.3-1, other volumes containing texts of treaties and other 
agreements as required or authorized by law. The "Treaty Informa- 
tion" part of the Department of State Bulletin is compiled by that 
office. 

750.3-3 Registration 

Article 102 of the United Nations Charter requires that every treaty 
and every international agreement entered into by a member of the 
United Nations be registered, as soon as possible, with the Secretariat 
and published by it. Article 83 of the Chicago Aviation Convention of 
1944 requires registration of aviation agreements with the council 
of the International Civil Aviation Organization. 

7504 United States as Depositary 

Inquiries from foreign diplomatic missions at Washington and from 
American diplomatic missions abroad with respect to the prepara- 
tion or deposit of instruments relating to any multilateral agree- 
ment of which the United States is depositary are referred to the 
Assistant Legal Adviser for Treaty Affairs. That officer is to be 
notified immediately of the receipt of any such document anywhere 
in the Department, inasmuch as a depositary is required to ascertain 
whether those documents are properly executed before accepting them 
for deposit, to keep accurate records regarding them, and to inform 
other governments concerned of the order and date of receipt of such 
documents. 

b. Before any arrangements are proposed or agreed to for the United 
States to serve as depositary for any international agreement, the 
views of the Assistant Legal Adviser for Treaty Affairs will be ob- 
tained. 

750.5 Records and Correspondence Custody 

a. The Assistant Legal Adviser for Treaty Affairs compiles and 
maintains authoritative records regarding the negotiation, signature, 
transmission to the Senate, and ratification or approval, as well as 
the existence, status, and application, of all international agreements 
to which the United States is or may become a party and, so far as 
information is available, of agreements between other countries to 



103 

which the United States is not a party. Inquiries on these subjects are 
addressed to, and outgoing communications cleared with, the Office 
of the Legal Adviser. 

b. To insure that the records regarding the matters described in 
this section are complete and up to date, it is important that all rele- 
vant papers be referred to the Office of the Legal Adviser. 

c. The Assistant Legal Adviser for Treaty Affairs is responsible 
for the custodv of originals of bilateral agreements and certified 
copies of multilateral agreements pending entry into force and com- 
pletion of manuscripts for publication. Following publication, such 
originals and certified copies are transferred to the National Archives. 
The Assistant Legal Adviser for Treaty Affairs retains custody of 
signed originals of multilateral agreements for which the United 
States is depositary, together with relevant instruments of ratifica- 
tion, adherence, acceptance, or approval, as long as those agreements 
remain active. 



2. Organization and Administration 
a. Responsibilities of Chiefs of U.S. Diplomatic Missions 
Text of Vol. 1, Foreign Affairs Manual, 011.2, revised January 27, 1970 

011.2 Responsibilities of Chiefs of U.S. Diplomatic Missions 

a. Executive Order No. 10893, Part II, November 8, 1960, reads as 

follows : 



"Section 201. Functions of Chiefs of United States Diplomatic 
Missions. The several Chiefs of the United States Diplomatic Mis- 
sions in foreign countries, as the representatives of the President 
and acting on his behalf, shall have and exercise, to the extent 
permitted by law and in accordance with such instructions as the 
President may from time to time promulgate, affirmative respon- 
sibility for the coordination and supervision over the carrying 
out by agencies of their functions in the respective countries." 
b. President Nixon sent to each American Ambassador the follow- 
ing letter: 

The White House, 
Washington, December 9, 1969. 
Dear Mr. Ambassador : 

Your mission as American Ambassador to (country of assignment) 
is of the utmost significance to our country and to me personally. 
I wish you every success in this endeavor. 

I attach the greatest importance to my Constitutional responsibili- 
ties for the conduct of our relations with other countries. As the per- 
sonal representative of the President of the United States, you share 
these responsibilities in the country to which you are accredited. 

You will, of course, report to me through and normally receive your 
instructions from the Secretary of State who has responsibility not 
only for the activities of the Department of State but also for the 
overall direction, coordination and supervision of United States Gov- 
ernment activities overseas. , 

I believe that all possible measures should be taken to improve and 
tighten the processes of foreign policy implementation abroad. I know 
I can count on your full support in directing the activities of all ele- 
ments of the United States Mission to achieve this objective. To assure 
you and all concerned that you have my full personal backing, I want 
to make the following comments on your own -authority and responsi- 
bilities. 

As Chief of the United States Diplomatic Mission, you have full re- 
sponsibility to direct and coordinate the activities and operations of all 
of its elements.^ You will exercise this mandate not only by providing 
policy leadership and guidance, but also by assuring positive program 

(104) 



105 

direction to the end that all United States activities in (the host coun- 
try) are relevant to current realities, are efficiently and economically 
administered, and are effectively interrelated so that they will make a 
maximum contribution to United States interests in that country as 
well as to our regional and international objectives. 

I am concerned that the size of our representation abroad be related 
to a stringent appraisal of policy and program requirements and that 
the number of personnel of all agencies be kept at the very minimum 
necessary to meet our objectives. I shall expect you to maintain a con- 
tinuing personal concern on this matter and to inform the Secretary 
of State when you believe that the staff of any agency or program is 
excessive. 

I shall expect you to assure the highest standards of personal conduct 
by all United States personnel, civilian or military ; you have authority 
to take any corrective action which in your judgment is necessary. 

You have, of course, the right to be kept informed, to the extent you 
deem necessary, of all the information or recommendations reported by 
any element of the Mission. The Secretary of State and I have made it 
clear that we will welcome the opportunity to consider alternative poli- 
cies and courses of actions before making final decisions. When you or 
other members of your Mission believe such alternatives merit con- 
sideration, we encourage your putting them forward along with your 
own recommendations. 

I will reserve for myself, as Commander-in-Chief, direct authority 
over the military chain of command to United States military forces 
under the command of a United States area military commander, and 
over such other military activities as I elect, as Commander-in-Chief, 
to conduct through military channels. 

However, I will expect you and the military commanders concerned 
to maintain close relations with each other, to keep each other cur- 
rently informed on matters of mutual interest and in general to co- 
operate in carrying out our national policy. If differences of view 
not capable of resolution in the field should arise, I will expect you to 
keep me informed through the Secretary of State. 

I deeply believe, as I said in my Inaugural Address, that forces now 
are converging that may make possible the realization of many of 
man's deepest aspirations. If "the times are on the side of peace." I 
also deeply believe that you. and the dedicated personnel of the For- 
eign Service and the other departments and agencies who comprise 
the staff of your Mission, will insure that we take maximum advan- 
tage of the opportunities that are so clearly before us. 

With my l>e>t wishes, 
Sincerely. 

Richard Xixox. 



20-039 O - 78 - 



b. Interdepartmental Operations of the U.S. Government 

Overseas 

(1) The National Security Council System (Presidential Direc- 
tive/NSC-2, January 20, 1977) 

To: The Vice President; 

The Secretary of State ; and 
The Secretary of Defense. 

Also : The Secretary of the Treasury ; The Attorney General ; The 
United States Representative to the United Nations ; The Director, 
Office of Management and Budget ; The Assistant to the President 
for National Security Affairs; The Chairman, Council of Eco- 
nomic Advisers; The Administrator, Agency for International 
Development; The Director, Arms Control and Disarmament 
Agency; The Director, United States Information Agency; The 
Chairman, Joint. Chiefs of Staff; The Director of Central Intelli- 
gence; and The Administrator, Energy Research and Develop- 
ment Administration. 

Subject : The National Security Council System. 

To assist me in carrying out my responsibilities for the conduct of 
national security affairs, I hereby direct the reorganization of the 
National Security Council system. The reorganization is intended to 
place more responsibility in the departments and agencies while insur- 
ing that the NSC, with my Assistant for National Security Affairs, 
continues to integrate and facilitate foreign and defense policy 
decisions. 

a. The National Security Council (NSC) 

The functions, membership, and responsibilities of the National 
Security Council shall be as set forth in the National Security Act of 
1047, as amended. In addition, other senior officials, including the Sec- 
retary of the Treasury, the Attorney General, the United States Rep- 
resentative to the United Nations, the Director of the Office of Manage- 
ment and Budget, the Assistant to the President for National Security 
Affairs, the Chairman of the Council of Economic Advisers, the Di- 
rector of the Alius Control and Disarmament Agency, the Chairman 
of the Joint Chiefs of Staff, the Director of Central Intelligence, and 
the Administrator of the Energy Research and Development Admin- 
istration, shall attend appropriate NSC meetings. 

The National Security Council shall be the principal forum for 
international security issues requiring Presidential consideration. The 
NSC shall assist me in analyzing, integrating and facilitating foreign, 
defense, and intelligence policy decisions. International economic and 
other interdependence issues which are pertinent to national security 
shall also be considered by the NSC. 

(106) 



107 

The Council shall meet regularly. The Assistant to the President for 
National Security Affairs, at my direction and in consultation with 
the Secretaries of State and Defense and. when appropriate, the Secre- 
tary of the Treasury and the Chairman, Council of Economic Advisers. 
shall he responsible for determining the agenda and insuring that the 
necessary papers are prepared. Other members of the XSC may pro- 
pose items for inclusion on the agenda The Assistant to the President 
shall be assisted by a. National Security Council staff, as provided by 
law. 

b. NSC Policy Review Committee 

An XSC Policy Review Committee is hereby established to develop 
national security policy for Presidential decision in those cases where 
the basic responsibilities fall primarily within a given department but 
where the subject also has important implication- for other depart- 
ments and agencies. This Committee shall deal with such matter- as: 

— foreign policy issues that contain significant military or other 
interagency aspects ; 

— defense policy issues having international implications and 
the coordination of the annual Defense budget with foreign policy 
object i 

— the preparation of a consolidated national intelligence budget 
and resource allocation for the [intelligence Community (thus as- 
suming under the chairmanship of the Director of Central Intel- 
ligence the function- and responsibilities of the Committee on 
Foreign Intelligence) : and 

— those international economic issues pertinent to U.S. foreign 

policy and security, with staffing of the underlying economic issues 

through the Economic Policy (iron]). 

I shall designate for each meeting the appropriate Chairman of 

the Policy Review Committee and attendance, depending on the 

subject matter being considered. Member-hip. in addition to the 

statutory members of the XSC and the Assistant for National Security 

Affairs, shall include, as appropriate, other senior officials. 

c. The NSC Special Coordination Committee 

A second NSC Committee, the Special Coordination Committee, 
is hereby established to deal with specific cross-cuttin<r issues requiring 
coordination in the development of options and the implementation 
of Presidential decisions. The Committee shall deal with such mat- 
ters as: the oversight of sensitive intelligence activities, such as covert 
operations, which are undertaken on Pre>idential authority: arms 
control evaluation: and it will assist me in crisis management. 
_ The Special Coordination Committee shall be chaired by the As- 
sistant for National Security Affairs. Membership shall include the 
statutory members of the XSC. or their representatives, and other 
senior officials, as appropriate. 

d. NSC Interdepartmental Groups 

Existing XSC Interdepartmental Groups, chaired by a desiccated 
senior departmental official, are to continue as needed under the direc- 
tion of the XSC Policy Review Committee. 



108 

The membership of the Interdepartmental Groups shall include the 
agencies represented on the NSC Policy Review Committee. De- 
pending on the issue under consideration, other agencies shall be 
represented at the discretion of the Policy Review Committee. 

e. National Security Council Ad Hoc Groups 

When appropriate, I intend to appoint NSC Ad Hoc Groups to 
deal with particular problems, including those which transcend de- 
partmental boundaries. 



3. Passport Regulations 

a. Regulations of the Secretary of State, Department Regula- 
tion 108.541, 22 CFR 50 through 53, October 20, 1966, 31 F.R. 13537, 
as amended 

PART 50— NATIONALITY PROCEDURES 

Authority : The provisions of this Part 50 issued under sec. 4, 63 
Stat. Ill, as amended, sees. 104, 360, 66 Stat. 174, 273; 22 U.S.C. 2658, 
8 U.S.C. 1104,1503. 

§ 50.1 Definitions. 

The following definitions shall be applicable to this part : 

(a) "United States" means the continental United States, the State 
of Hawaii, the Commonwealth of Puerto Rico, the Virgin Islands of 
the United States, the Canal Zone, American Samoa, Guam and any 
other islands or territory over which the United States exercises 
jurisdiction. 

(b) "Department'' means the Department of State of the United 
States of America. 

(c) "Secretary" means the Secretary of State. 

(d) "National" means a citizen of the United States or a noncitizen 
owing permanent allegiance to the United State-. 

(e) "Passport" means a travel document issued under the authority 
of the Secretary of State attesting to the identity and nationality of 
the bearer. 

(f) "Passport Agent" means a person designated by the Depart- 
ment to accept passport applications. 

[Dept. Reg. 108.541, 31 F.R. 13537, Oct. 20, 1966, as amended at 31 
F.R. 14521, Nov. 11, 1966] 

Subpart A — Procedures for Determination of United States 
Nationality of a Person Abroad 

§ 50.2 Determination of U.S. nationality of persons abroad. 

The Department shall determine claims to United States national- 
ity when made by persons abroad on the basis of an application for 
registration, for a passport, or for registration of birth. 

§ 50.3 Application for registration. 

(a) A person abroad who claims U.S. nationality, or a representa- 
tive on his behalf, may apply at a consular post for registrations es- 
tablish his claim to U.S. nationality or to make his residence in the 
particular consular area a matter of record. 

(b) The applicant shall execute the registration form prescribed 
by the Department and shall submit the supporting evidence required 

(109) 



110 

by Subpart C of Part 51 of this chapter. The diplomatic or consular 
officer shall determine the period of time for which the registration 
will be valid. 

§ 50.4 Application for passport. 

A claim to U.S. nationality in connection with an application for 
passport shall be determined by posts abroad in accordance with the 
regulations contained in Part 51 of this chapter. 

§ 50.5 Application for registration of birth abroad. 

Upon application by the parents or their representative, a consular 
officer may record the birth of a U.S. citizen child in his consular dis- 
trict. The officer shall require the applicant to submit evidence meeting 
the requirements of Subpart C of Part 51 of this chapter and shall 
include : 

(a) Proof of chilaVs birth. Proof of child's birth usually consists of, 
but is not limited to, an authentic copy of the record of the birth filed 
with local authorities, a baptismal certificate, a military hospital cer- 
tificate of birth, or an affidavit of the doctor or the person attending the 
birth. If no proof of birth is available, the person seeking to register the 
birth shall submit his affidavit explaining why such proof is not avail- 
able and setting forth the facts relating to the birth. 

(b) Proof of chilaVs citizenship. Evidence of parent's citizenship 
and, if pertinent, evidence of parent's physical presence in the United 
States as required for transmittal of claim of citizenship by the Immi- 
gration and Nationality Act of 1952 shall be submitted. 

§ 50.6 Registration at the Department of birth abroad. 

In the time of war or national emergency, passport agents may be 
designated to complete consular reports of birth for children born at 
military facilities which are not under the jurisdiction of a consular 
office. An officer of the Armed Forces having authority to administer 
oaths may take applications for registration under this section. 

§50.7 Report of birth. 

(a) Upon submission of satisfactory proof of birth and nationality, 
and at the time of the recording of the birth, the consular officer shall 
issue to the parent or person in interest, when requested and upon pay- 
ment of the prescribed fee, a consular report of birth. The Authenti- 
cation Officer of the Department may issue additional copies of the 
report of birth. 

(b) When it records a birth under § 50.6, the Department shall fur- 
nish a copy of the "Report of Birth" without fee to the parent or per- 
son in interest. 

§ 50.8 Certification of birth. 

(a) At the time of registration of birth, the consular officer shall 
furnish without fee to the parent or person in interest a certificate en- 
titled "Certification of Birth." 

(b) At any time subsequent to the registration of birth, when re- 
quested and upon payment of the required fee, the Authentication 
Officer of the Department of State shall issue to the parent or person 
in interest a "Certification of Birth." 

§ 50.9 Card of identity and registration. 

When authorized by the Department, a consular officer may issue 
a card of identity and registration for travel to the United States to 



Ill 

a national of the United States being deported from a foreign country, 
to nationals involved in a common disaster abroad, or to a returning 
national whose passport facilities have been denied or withdrawn 
under the provisions of this Part 50 or Part 51 or 53 of this subchapter. 

TDept. Reg. 108.541, 31 F.R. 13537, October 20, 1966, as amended by 
Dept. Reg. 108.665, 37 F.R. 11459, June 8, 1972] 

§ 50.10 Certificate of nationality. 

(a) Any person who acquired the nationality of the United States at 
birth and who is involved in any judicial or administrative proceedings 
in a foreign state and needs to establish his U.S. nationality may apply 
for a certificate of nationality in the form prescribed by the 
Department. 

(b) An applicant for a certificate of nationality must submit evi- 
dence of his nationality and documentary evidence establishing that he 
is involved in judicial or administrative proceedings in which proof of 
his U.S. nationality is required. 

§ 50.11 Certificate of identity for travel to the United States to 
apply for admission. 

(a) A person applying abroad for a certificate of identity under 
section 360 (b) of the Immigration and Nationality Act shall com- 
plete the application form prescribed by the Department and submit 
evidence to support his claim to U.S. nationality. 

(b) When a diplomatic or consular officer denies an application for 
a certificate of identity under this section, the applicant may submit a 
written appeal to the Secretary, stating the pertinent facts, the grounds 
upon which U.S. nationality is claimed and his reasons for considering 
that the denial was not justified. 

[Dept. Reg. 108.541, 31 F.R. 13537, October 20, 1966, as amended at 
31 F.R. 14521, November 11, 1966] 

Subpart B — Retention and Resumption of Nationality 

§ 50.20 Retention of nationality. 

(a) Section 350 of the Immigration and Nationality Act. A per- 
son who desires to retain his U.S. nationality under the provisions of 
section 350 of the Immigration and Nationality Act may satisfy the re- 
quirement of section 350 (1) by taking an oath of allegiance, within 
the time period specified in the statute, in connection with an applica- 
tion for a passport or for registration as a United States national. 

(b) Section 351(b) of the Immigration and Nationality Act. (1) 
A person who desires to claim U.S. nationality under the provisions 
of section 351 (b) of the Immigration and Nationality Act must, with- 
in the time period specified in the statute, assert his claim to U.S. na- 
tionality and subscribe to an oath of allegiance before a diplomatic 
or consular officer. 

(2) In addition, the person shall submit to the Department a state- 
ment reciting his identity and acquisition or derivation of U.S. na- 
tionality, the facts pertaining to the performance of any act which 
would otherwise have been expatriative, and his desire to retain his 
U.S. nationality. 



112 

§ 50.30 Resumption of nationality. 

(a) Section 32b(c) of the Immigration and Nationality Act. (1) 
A woman formerly a citizen of the United States at birth who wishes 
to regain her citizenship under section 324(c) of the Immigration and 
Nationality Act may apply abroad to a diplomatic or consular officer 
on the form prescribed by the Department to take the oath of allegiance 
prescribed by section 337 of that Act. 

(2) The applicant shall submit documentary evidence to establish 
her eligibility to take the oath of allegiance. If the diplomatic or con- 
sular officer or the Department determines, when the application is 
submitted to the Department for decision, that the applicant is in- 
eligible for resumption of citizenship because of section 313 of the 
Immigration and Nationality Act, the oath shall not be administered. 

(b) The Act of June %5, 1936. (1) A woman who has been restored 
to citizenship by the Act of June 25, 1936, as amended by the Act of 
July 2, 1940, but who failed to take the oath of allegiance prior to 
December 24, 1952, as prescribed by the nationality laws, may apply 
abroad to any diplomatic or consular officer to take the oath of al- 
legiance as prescribed by section 337 of the Immigration and Na- 
tionality Act. 

(2) The applicant shall submit documentary evidence to establish 
her eligibility to take the oath of allegiance. If the diplomatic or con- 
sular officer or the Department determines, when the application is 
submitted to the Department, that the applicant is ineligible for re- 
sumption of citizenship under section 313 of the Immigration and 
Nationality Act, the oath shall not be administered. 

(c) Certification of repatriation. Upon request and payment of the 
prescribed fee, a diplomatic or consular officer or the Department shall 
issue a certified copy of the application and oath administered to a 
woman repatriated under this section. 

Subpart C — Loss of Nationality 

§ 50.40 Revocation of naturalization under section 340(d). 

(a) Whenever a diplomatic or consular officer determines that an 
individual, within 5 years of the date upon which he was naturalized, 
has established permanent residence abroad, and has failed to over- 
come the presumption set forth in section 340(d) of the Immigration 
and Nationality Act, the officer shall prepare and forward to the De- 
partment an affidavit setting forth his findings. Before forwarding the 
affidavit to the Department, the diplomatic or consular officer shall give 
written notice to the person affected of his contemplated action and 
afford the person a reasonable opportunity to present countervaling 
evidence. 

(b) If the Department agrees that the provisions of section 340(d) 
of the Immigration and Nationality Act are applicable, it shall for- 
ward an authenticated copy of the consular officer's affidavit, and other 
relevant evidence to the Department of Justice for appropriate action. 

§ 50.41 Certification of loss of U.S. nationality. 

(a) Whenever a diplomatic or consular officer has reason to believe, 
that a person, while in a foreign country, has lost his U.S. nationality 
under any provision of Chapter 3 of Title III of the Immigration and 



113 

Nationality Act of 1952. or under any provision of Chapter IV of the 
Nationality Act of 1940. as amended, he shall prepare a certificate of 
loss of nationality containing the facts upon which such belief is based 
and shall forward the certificate to the Department. 

(b) If the diplomatic or consular officer determines that any docu- 
ment containing information relevant to the statements in the certifi- 
cate of loss of nationality should not be attached to the certificate, he 
may summarize the pertinent information in the appropriate section of 
(he certificate and send the documents together with the certificate to 
the Department. 

(c) 'Whenever a person admits that he has expatriated himself by 
the voluntary performance of one of the acts of fulfillment of one of 
the conditions specified in Chapter 3. Title III of the Immigration and 
Nationality Act of 1952 or section 401 of the Nationality Act of 1940, 
and consents to the execution of an affidavit to that effect, the diplo- 
matic or consular officer shall recite in or attach to the certificate the 
person's affidavit. 

(d) If the certificate of loss of nationality is approved by the De- 
partment, a copy shall be forwarded to the Immigration and Naturali- 
zation Service. Department of Justice. The diplomatic or consular office 
in which the certificate was prepared shall then forward a copy of the 
certificate to the person to whom it relates or his representative. 

§ 50.42 Determination of loss of nationality abroad in connection 
with application for passport in the United States. 

The Department shall determine that a person in the United States 
has lost his U.S. citizenship while abroad only in connection with an 
application for a passport. 

§ 50.50 Renunciation of nationality. 

(a) A person desiring to renounce his U.S. nationality under section 
349(a)(6) of the Immigration and Nationality Act shall appear be- 
fore a diplomatic or consular officer of the United States and take an 
oath of renunciation of nationality of the United States in the manner 
and form prescribed by the Department. The renunciant must include 
on the form he signs^ a statement that he absolutely and entirely re- 
nounces his U.S. nationality together with all rights and privileges 
and all duties of allegiance and fidelity thereunto pertaining. 

(b) The diplomatic or consular officer shall forward to the Depart- 
ment for approval the oath of renunciation together with a certificate 
of loss of nationality as provided by section 358 of the Immigration 
and Nationality Act. If the officer's report is approved by the Depart- 
ment, copies of the certificate shall be forwarded to the Immigration 
and Naturalization Service, Department of Justice, and to the person 
to whom it relates or his representative. 

§ 50.51 Certification of expatriation. 

The procedures under this part shall also apply to the preparation, 
approval or disapproval of certificates of expatriation. Where loss 
of nationality occurs under provisions of law other than those specified 
in section 358 of the Immigration and Nationality Act of 1952, the 
diplomatic or consular officer shall prepare a certificate of expatria- 
tion instead of a certificate of loss of nationality. 



114 

Subpart D — Procedures for Review of Loss of Nationality 1 

§ 50.60 Appeal by nationality claimant. 

A person who contends that the Department's administrative hold 
ing of loss of nationality or expatriation in his case is contrary to la^ 
or fact shall be entitled, upon written request made within a reason 
able time after receipt of notice of such holding, to appeal to the Board 
of Appellate Review. 

["Dept. Reg. 108.574, 32 F.R. 16259, Nov. 29, 1967] 

§ 50.61 Composition of the Board of Appellate Review in Nation- 
ality Cases. 

The Board of Appellate Review (Part 7 of this Title 22) when con- 
sidering an appeal under § 50.60 shall consist of two Regular Members 
and one ad hoc member. The ad hoc member shall be selected from a 
panel of five officers of the Department designated by the Deputy 
Under Secretary for Administration. Such officers shall be attorneys. 

[Dept. Reg. 108.574, 32 F.R. 16259, Nov. 29, 1967] 
§ 50.62 Chairman. 

One of the members of the Board shall be designated by the Deputy 
Under Secretary of State for Administration as Chairman. The Chair- 
man or his designee shall preside at all hearings of the Board and 
shall be empowered in all respects to regulate the conduct of the hear- 
ing and to pass on all issues relating thereto. The Chairman or his des 
ignee shall be empowered to administer oaths and affirmations. 

[Dept. Reg. 108.574, 32 F.R. 16259, Nov. 29, 1967] 
§ 50.63 Functions of the Board. 

The Board shall consider all appeals under §50.60 and shall take 
any action it considers necessary and proper to the disposition of the 
cases appealed to it. The Board may adopt and make public rules 
of procedure approved by the Secretary. 

§ 50.64 Scope of review on appeal. 

The Board shall receive evidence and, if there is a hearing hear 
argument on the facts and the law applicable to the case under con- 
sideration. The Board shall not consider argument challenging thr 
constitutionality of any law. 

§ 50.65 Appearance before the Board. 

Any party to any proceeding before the Board may appear in 
person or by or with his attorney or any other representative who has 
his written authority to represent him. 

§ 50.66 Hearing before the Board. 

The appellant shall be entitled, at his or his representative's request, 
to a hearing before the Board. The appellant may appear and testify 
in his own behalf and may present witnesses and offer evidence. The 
Passport Office may also present witnesses and offer other evidence 
and make argument. The appellant and witnesses may be examined by 
any member of the Board and by the representative of the Passport 
Office. Tf any witness whom the appellant or the Passport Office wishes 

" D«pt Be* 108.074. 32 F.B. 10250. Not. 20. 1067 



115 

to call is unable to appear personally, the Board may, in its discretion, 
accept an affidavit by the witness or order evidence to be taken bv 
deposition. The appellant shall be entitled to be informed of all evi- 
dence before the Board and of the source of such evidence, and shall 
be entitled to confront and cross-examine any adverse witness. The 
Board may request a stipulation of facts prior to or at the begin- 
ning of the hearing and may request supplemental statements on issue? 
presented to it or confirmation, verification, or authentication of any 
evidence submitted by or on behalf of the appellant. 

§ 50.67 Admissibility of evidence. 

The appellant and the Passport Office may introduce such evidence 
as the Board deems proper. Formal rules of evidence shall not apply, 
but reasonable restrictions shall be imposed as to the relevancy, com- 
petency and materiality of evidence presented. 

§ 50.68 Privacy of hearings. 

Hearings shall be private. There shall be present at the hearing only 
the appellant, his counsel or representative, the members of the Board, 
official stenographers, Department employees, and the witnesses. Wit- 
nesses shall be present at the hearing only while actually giving testi- 
mony or when otherwise directed by the Board. 

§ 50.69 Transcript of hearing. 

A complete verbatim transcript shall be made of the hearing, if any, 
by a qualified reporter. Upon request, the appellant or his counsel shall 
have the right to inspect the complete transcript and to purchase a 
copy thereof. 

§ 50.70 Record of the proceedings. 

The record of the hearing shall consist of the stipulation of facts, 
if any, the evidence admitted, the transcript of hearing and the appel- 
lant's file. Tf a hearing is not held, the record shall consist of the appel- 
lant's written petition, supporting evidence, and the appellant's file. 
All decisions of the Board shall be made on the basis of the record. 

§ 50.71 Decision of the Board. 

The decision shall be by majority vote, in writing, and shall set out 
with particularity the finding of fact and conclusions of law on which 
it is based. 

§ 50.72 Notification of appellant. 

The Board's decision shall be promptly communicated in writing to 
the appellant. 

PART 51— PASSPORTS 

Authority : The provisions of this Part 51 issued under sec. 1, 44 
Stat. 887, sec. 4, 63 Stat. Ill, as amended; 22 U.S.C. 211a, 2658, E.O. 
11295; 3 CFR, 1966 Comp. 

§ 51.1 Definitions. 

The following definitions shall be applicable to this part: 
(a) "United States" means the continental United States, the State 
of Hawaii, the Commonwealth of Puerto Rico, the Virgin Islands of 
the United States, the' Canal Zone, American Samoa, Guam and any 
other islands or territory over which the United States exercises juris- 
diction. 



116 

(b) "Department" means the Department of State of the United 
States of America. 

(c) "Secretary" means the Secretary of State. 

(d) "National" means a citizen of the United States or a noncitizen 
owing" permanent allegiance to the United States. 

(e) "Passport" means a travel document issued under the authority 
of the Secretary of State attesting to the identity and nationality of 
the bearer. 

(f ) "Passport Agent" means a person designated by the Depart- 
ment to accept passport applications. 

(g) "Passport Issuing Office" means the Passport Office, a Passport 
Agency, a Passport Agent of the Department, or a Foreign Service 
Post authorized to issue passports. 

TDept. Reg. 108.541, 31 F.R. 13540, Oct. 20, 1966, as amended at 31 
F.R. 14522, Nov. 11, 1966] 

Subpart A— General 

§ 51.2 Passports issued to nationals only. 

(a) A United States passport shall be issued only to a national of 
the United States and can include therein only nationals of the United 
States (22U.S.C.212). 

(b) Unless authorized by the Department, no person shall bear or be 
included in more than one valid or potentially valid U.S. passport at 
any one time. 

§ 51.3 Types of passports. 

(a) Regular passport. A regular passport is issued to a national of 
the United States proceeding abroad for personal or business reasons. 

(b) Official passport. An official passport is issued to an official or 
employee of the U.S. Government proceeding abroad in the discharge 
of official duties. Where appropriate, dependents of such persons may 
be issued official passports. 

(c) Diplomatic passport. A diplomatic passport is issued to a For- 
eign Service Officer, a person in the diplomatic service or to a person 
having diplomatic status either because of the nature of his foreign 
mission or by reason of the office he holds. Where appropriate, depend- 
ents of such persons may be issued diplomatic passports. 

§ 51.4. Validity of passports. 

(a) Signature of bearer. A passport is valid only when signed by 
the bearer in the space designated for his signature. 

(b) Period of validity of a regular passport. A regular passport 
issued on or after August 26, 1968, is valid for a period of 5 years 
from date of issue unless limited by the Secretary to a shorter period. 
An outstanding, unrenewed passport issued within 5 years prior to 
August 26, 1968, is valid for 5 years from date of issue unless other- 
wise limited by the Secretary. 

(c) Period of validity of an official passport. An official passport is 
normally valid for a period of 5 years from the date of issue as long 
as the bearer maintains the official status for which it is issued. It must 
be returned to the Department upon the termination of the bearer's 
official status. 



117 

(d) Period of validity of a diplomatic passport. A diplomatic pass- 
port issued on or after January 1, 1977 is valid for a period of five (5) 
years or so long as the bearer maintains his/her diplomatic status, 
whichever is shorter. A diplomatic passport which has not expired 
must be returned to the Department upon the termination of the 
bearer's diplomatic status or at such other time as the Secretary shall 
determine. Any outstanding diplomatic passport issued before Jan- 
uary 1, 1977 will expire effective December 31, 1977. 

(e) Limitation and extension of validity. The period of validity 
of any passport may be limited by the Secretary to less than the nor- 
ma^ 5-year validity period. Applications for extensions of passports 
limited to less than the full validity period must be made in writing 
and must be submitted to a Passport Issuing Office. In no event may a 
passport be extended beyond the normal period of validity. 

[Dept. Reg. 108.594, 33 F.R. 12042. Aug. 24, 1968, as amended at Dept. 
Reg. 108.734, 42 F.R. 17809, April 4. 1977] 

§ 51.5 Persons who may be included in one passport. 

(a) The following persons may be included in one passport: 

(1) The spouse of the bearer; 

(2) Children of the bearer under the age of 13 years, including 
stepchildren and adopted children; 

(3) Brothers and sisters of the bearer under the age of 13 years. 

(b) A person included in the passport of another may not use the 
passport for travel unless he is accompanied by the bearer. 

[Dept. Reg. 108.635, 36 F.R. 5090. March 26, 1971, as amended at Dept. 
Reg. 108.751,43 F.R. 1791. Jan. 12. 1978.] 

§ 51.6 Mutilation and alteration of passports. 

Any passport which has been materially changed in physical ap- 
pearance or composition, or which includes unauthorized changes, 
obliterations, entries or photographs may be invalidated. 

§ 51.7 Verification of passports. 

When required by the officials of a foreign government, an Ameri- 
can Foreign Service office may verify a U.S. passport at the request 
of the bearer or of the foreign government. 

§ 51.8 Cancellation of previously issued passport. 

(a) Upon applying for a new passport, an applicant shall submit 
for cancellation any previous passport still valid or potentially valid. 

(b) If an applicant is unable to produce such a passport for cancel- 
lation, he shall submit a signed statement setting forth the circum- 
stances surrounding the disposition of the passport and if it is claimed 
to have been lost, the efforts made to recover it. A determination will 
then be made whether to issue a new passport and whether such pass- 
port shall be limited as to place and periods of validity. 

[Dept. Reg. 108.541, 31 F.R. 13540, Oct. 20, 1966, as amended at 31 
F.R. 14521, Nov. 11, 1966] 

§ 51.9 Passport property of the U.S. Government 

A passport shall at all times remain the property of the United 
States and shall be returned to the Government upon demand. 



118 

Subpart B— Application 
§51.20 General. 

An application for a passport or for an amendment of a passport 
shall be completed upon such forms as may be prescribed by the De- 
partment. The passport applicant shall truthfully answer all ques- 
tions, and shall state each and every material matter of fact, pertaining 
to his eligibility for a passport. All information and evidence sub- 
mitted in connection with an application shall be considered a part 
thereof. 

[Dept. Reg. 108.594, 33 F.R. 12043, Aug. 24, 1968] 

§ 51.21 Execution of passport application. 

(a) First-time applicants. A person who has never been issued a 
passport in his own name shall appear in person, verify his applica- 
tion by oath or affirmation before a person authorized arid empowered 
by the Secretary to administer oaths, and remit the established fees. 

(b) Persons authorized and empowered by the Secretary to ad- 
minister oaths. The following persons are hereby authorized and em- 
powered by the Secretary to administer oaths for passport purposes : 

(1) A passport agent. 

(2) A clerk of any Federal court. 

(3) A clerk of any State court of record or a judge or clerk of any 
probate court. 

(4) A postal employee designated by the postmaster at a post office 
which has been selected to accept passport applications. 

( 5 ) A diplomatic or consular officer abroad. 

(6) Any other persons specifically designated by the Secretary. 

(c) Persons who have previously been issued a passport. A per- 
son in the United States who has previously been issued a passport in 
his own name may obtain a new passport by filling out and mailing a 
specially prescribed application together with his previous passport, 
two signed photographs taken within 6 months of application and the 
established fee to the nearest U.S. Passport Agency or to the Passport 
Office in Washington, provided he meets the following requirements : 

(1) The previous passport must have been issued when the applicant 
was 18 years of age or over. 

(2) The previous passport must have been issued within 8 years 
prior to the date of the present application. 

(3) The previous passport must be submitted with the present appli- 
cation. If the applicant is unable to meet the above requirements he 
must execute an application in accordance with paragraph (a) of this 
section. 

(d) Inclusions. If any person other than the applicant is to be in- 
cluded in a passport the application must be executed in accordance 
with paragraph (a) of this section. 

(e) Diplomatic and official passport applications. The provisions- 
of paragraph (c) of this section shall not apply to applications for 
diplomatic or official passports. 

[Dept. Reg. 108.594, 33 F.R. 12043, Aug. 24, 1968, as amended by 
Dept. Reg. 108.623, 35 F.R. 10656, July 1, 1970; and at 40 F.R. 1512, 
Jan. 8, 1975] 



119 

§51.22 Execution of application by husband or wife to be in- 
cluded in the other's passport. 

A husband or wife to be included in the passport of the other shall 
swear to or affirm the facts pertaining to his or her identity and citizen- 
ship. 

[Dept. Reg. 108.594, 33 F.R. 12043, Aug. 24, 1968] 

§ 51.23 Names of applicant and persons to be included. 

The passport application shall contain the full name of the applicant 
and of any person to be included in the passport. The applicant shall 
explain any material discrepancies between the names to be placed in 
the passport and the names recited in the evidence of citizenship and 
identity submitted. The passport issuing office may require documen- 
tary evidence or affidavits of persons having knowledge of the facts to 
support the explanation of the discrepancies. 

§ 51.24 Change of name. 

An applicant whose name has been changed by court order or decree 
shall submit with his application a certified copy of the order or decree. 
An applicant who has changed his name by the adoption of a new 
name without formal court proceedings shall submit with his applica- 
tion evidence that he has publicly and exclusively used the adopted 
name over a long period of time. 

§ 51.25 Photographs. 

(a) Photographs of hearer. The applicant shall submit with his 
application identical photographs of himself alone taken within 6 
months of the application, which are a good likeness and >atisfactorily 
identify the applicant. The photographs shall l>e signed by the appli- 
cant in the same manner and form as the application. Xo joint photo- 
graphs of the bearer and included person (s) will be acceptable. 

(b) Photographs of included / An applicant who wishes to 
include members of his family shall submit two identical photographs 
showing only the included persons. When more than one person is to 
be included, group photographs of the included persons are required. 
Composite photographs are not acceptable. Separate photograph- of 
each individual to be included may not be submitted; only group 
photographs are acceptable for this purpose. The photographs must 
be consistent with the photograph requirements in paragraph (a) of 
this section : however, they need not be signed. 

(c) Photographs of uniformed personnel. Only applicants who 
are in the active service of the Armed Forces and proceeding abroad 
in the discharge of their duties may submit photographs in the uni- 
form of the Armed Forces of the United States. 

(d) Unacceptable photographs. A photograph with a waxed back 
or other coating which lessens adhesiveness is not acceptable. News- 
paper or magazine pictures, snapshots, or full length photographs are 
not acceptable. Photographs of persons in the uniform of a civilian 
organization, except religious dress, will not generally be accepted. 
[Dept. Keg. 108.751, 43 F.R. 1791, Jan. 12, 1978] 

§ 51.26 Incompetents. 

A parent, a legal guardian, or a person in loco parentis shall execute 
a passport application* on behalf of a person declared incompetent. 



120 

§51.27 Minors. 

(a) Definitions. A minor is an unmarried person under the age of 
18 years: 

(b) Execution of application by minors. A minor of age 13 years 
or above shall execute an application on his own behalf unless in the 
judgment of the person before whom the application is executed it is 
not desirable for the minor to execute his own application. In such 
case it must be executed by a parent or guardian of the minor, or by 
a person in loco parentis. A parent, guardian or person in loco parentis 
shall execute the application for minors under the age of 13 years. The 
passport issuing office may require a minor under the age of 18 years 
to obtain and submit the written consent of a parent, a legal guardian 
or a person in loco parentis to the issuance of the passport. 

(c) Objection by parent or guardian in cases not involving the 
custody of the minor. At any time prior to the issuance of a passport 
to a minor and upon receipt of a written objection from a person hav- 
ing legal control of the minor, the passport issuing office may disap- 
prove the minor's application. 

(d) Objection by parent or guardian in cases involving the cus- 
tody of the minor. When there is controversy concerning the custody 
of a minor, the passport issuing office will issue a passport to the minor 
unless it receives a court order giving custody or the minor to the ob- 
jecting parent, legal guardian, or person in loco parentis. 

[Dept. Keg. 108.541, 31 F.R. 13540, Oct. 20, 1966, as amended at 31 
F.R. 14521, Nov. 11, 1966. and at Dept. Reg. 108.751. 43 F.R. 1791. 
Jan. 12, 1978] 

§ 51.28 Identity of applicant 

(a) If the applicant or any person to be included is not personally 
known to the official receiving the application he shall establish his 
identity by the submission of a previous passport, other identifying 
documents or by an identifying witness. 

(b) If an applicant submits an application under the provisions of 
paragraph (c) of § 51.21 he must submit a prior passport with his 
application. 

(c) Any official receiving an application for a passport or any Pass- 
port Issuing Office may require such additional evidence of identity as 
may be deemed necessary. 

[Dept. Reg. 108.594, 33 F.R. 12043, Aug. 24, 1968] 

§ 51.30 Persons unacceptable as witnesses. 

The passport issuing office will not accept as witness to a passport 
application a person who has received or expects to receive a fee for 
his services in connection with executing the application or obtaining 
the passport. 

§ 51.31 Affidavit of identifying witness, 

(a) An identifying witness shall execute an affidavit stating: That 
he resides at a specific address ; that he knows or has reason to believe 
that the applicant is a citizen of the United States ; the basis of his 
knowledge concerning the applicant ; and that the information set 
out in his affidavit is true to the best of his knowledge and belief. 

(b) If the witness has a U.S. passport, he shall state the place of 
issue and, if possible, the number and approximate date of issue. 



121 

(c) The identifying witness shall subscribe to his statement before 
the same person who took the passport application. 

TDept. Reg. 108.541, 31 F.R. 13540, Oct. 20, 1966, as amended at 31 
F.R. 14521, Nov. 11, 1966] 

§ 51.32 Amendment of passports. 

(a) Request for amendment. Applications for amendment of a 

passport shall be mnde on forms prescribed by the Department. 

(b) Inclusion by amendment. An amended passport may include 
any of the persons entitled to inclusion under § 51.5. However, a pass- 
port may not be amended to include : 

(1) A person who bears or is already included in a valid passport, 
unless that passport is submitted for cancellation or amendment to 
exclude such person, or satisfactory explanation is made why the pass- 
port cannot be submitted. 

(2) A person previously excluded from that same passport. 

(c) Exclusion of the bearer by amendment. A passport cannot be 
amended to exclude the person to whom the passport was issued. 

§ 51.33 Release of passport information. 

Information in passport files is privileged and shall not be released 
except : 

(a) At the request of an applicant or a person acting in his behalf 
for copies of documents executed or submitted by the applicant. 

(b) Pursuant to a subpoena or court order directing the production 
of passport records. 

(c) At the request of another Government agency. 

(d) When expressly authorized by the Secretary. 

Subpart C— Evidence of U.S. Citizenship or Nationality 

§ 51.40 Burden of proof. 

The applicant has the burden of proving that he and any persons to 
be included in the passport are nationals of the United States. 

§ 51.41 Documentary evidence. 

Every application shall be accompanied by evidence of the U.S. na- 
tionality of the applicant and of any other person to be extended pass- 
port services. 

§ 51.43 Persons born in the United States applying for a passport 
for the first time. 2 

(a) Primary evidence of birth in the United States. A person born 
in the United States in a place where official records of birth were 
kept at the time of his birth shall submit with the application for a 
passport a birth certificate under the seal of the official custodian of 
birth records. To be acceptable, a certificate must show the full name 
of the applicant, place and date of birth, and that the record thereof 
was recorded at the time of birth or shortly thereafter. 

(b) Secondary evidence of birth in the United States. If the appli- 
cant cannot submit primary evidence of birth, he shall submit the best 
obtainable secondary evidence. If a person was born at a place in the 
United States when birth records were filed, he must submit a "no 
record" certification from the official custodian of such birth records 



20-039 O - 78 



122 

before secondary evidence may be considered. The passport issuing 
office will consider, as secondary evidence, baptismal certificates, cer- 
tificates of circumcision, or other documentary evidence created shortly 
after birth but not more than 5 years after birth, and/or affidavits of 
persons having personal knowledge of the facts of the birth. 

[Dept. Reg. 108.685, 38 F.R. 4667, February 20, 1973] 

§ 51.44 Persons born abroad applying for a passport for the first 
time. 2 

(a) Naturalization in own right, A person naturalized in his own 
right as a U.S. citizen shall submit with his application his certificate 
of naturalization. 

(b) Derivative citizenship at birth. (1) An applicant who claims 
to nave derived citizenship by virtue of his birth abroad to a U.S. citi- 
zen parent or parents may submit his own certificate of citizenship 
(Section 1993, Revised Statutes, as amended by Act of May 24, 1934; 
section 201 of the Nationality Act of 1940 ; section 301 of the Immigra- 
tion and Nationality Act of 1952) . 

(2) In lieu of a certificate of citizenship, the applicant may submit 
evidence of his parent (s)' citizenship at the time of his birth, and evi- 
dence of his and his parent (s)' residence and physical presence in the 
United States. The passport issuing office may require the applicant to 
establish the marriage of his parents and/or grandparents and his 
relationship to them. 

(c) Derivative citizenship subsequent to birth. (1) An applicant 
who claims U.S. citizenship by virtue of the naturalization of his 
parent or parents subsequent to his birth may submit his own certifi- 
cate of citizenship. 

(2) In lieu of a certification of citizenship, the applicant may submit 
the naturalization certificate of the parent or parents through whom 
he claims U.S. citizenship. In this case, he must also show that he re- 
sided in the United States during minority as required by the law under 
which he claims citizenship. 

(3) If an applicant claims citizenship through a mother who re- 
sumed citizenship or a parent who was repatriated, he must submit evi- 
dence thereof. The applicant must establish also that he resided in thp 
United States for the period prescribed by law. 

Married Women 

§ 51.45 Marriage to an alien prior to March 2, 1907. 

A woman citizen of the United States who married an alien prior to 
March 2, 1907, did not lose her U.S. citizenship unless she acquired 
as a result of the marriage the nationality of her husband and there- 
after took up a permanent residence abroad prior to September 22. 
1922. 

§ 51.46 Marriage to an alien between March 2, 1907, and Septem- 
ber 22, 1922. 

(a) A woman citizen of the United States who married an alien be- 
tween March 2, 1907, and September 22, 1922, lost her U.S. citizenship, 

•Heading as amended by Dept. Reg. 108.594, 33 F.R. 12043, August 24, 1968. Sectlor 
51.42 deleted by Dept. Reg. 108.594. 



123 

except as provided in paragraph (b) of this section. At the termina- 
tion of the marital relation she could resume her U.S. citizenship, if 
abroad, by registering as a U.S. citizen within 1 year with a Consul of 
the United States, or by returning to reside in the United States, or. 
if resident in the United States, by continuing to reside therein. (Sec- 
tion 3 of the Act of March 2. 1907. ) 

(b) A woman citizen of the United States who married an alien be- 
tween April 6, 1917, and July 2. 1921. did not lose her citizenship, if 
the marriage terminated by death or divorce prior to July 2, 1921, or 
if her husband became a U.S. citizen prior to that date. She may 
establish her citizenship by proving her U.S. citizenship prior to 
marriage and the termination of the marriage or acquisition of U.S. 
citizenship by her husband prior to July 2. 1921. 

§ 51.47 Marriage prior to September 22, 1922, to an alien who ac- 
quired U.S. citizenship by naturalization prior to September 
22, 1922. 

A woman citizen of the United States who lost her citizenship by 
virtue of her marriage to an alien between March 2, 1907, and Septem- 
ber 22, 1922, and who reacquired U.S. citizenship through the naturali- 
zation of her husband prior to September 22, 1922, may establish her 
U.S. citizenship by submitting her husband's certificate of naturali- 
zation. 

§ 51.48 Marriage between September 22, 1922, and March 3, 1931, 
to an alien ineligible to citizenship. 

A woman citizen of the United States who lost her U.S. citizenship 
by virtue of her marriage to an alien ineligible to citizenship between 
September 22, 1922. and March 3, 1931, but who reacquired her citizen- 
ship by naturalization in accordance with applicable law shall sub- 
mit with her application her certificate of naturalization (sec. 3 of the 
Act of Mar. 3, 1931). 

§ 51.49 Marriage on or after September 22, 1922, to an alien eligi- 
ble to naturalization. 

A woman citizen of the United States who on or after September 22, 
1922, married an alien eligible for naturalization did not thereby lose 
her U.S. citizenship and need only submit evidence of her own citizen- 
ship before a passport issuing office. 

§ 51.50 Alien born woman — marriage to citizen prior to Septem- 
ber 22, 1922. 

An alien woman who acquired U.S. citizenship by virtue of her mar- 
riage to a citizen of the United States prior to September 22, 1922, 
shall submit with her application evidence of her husband's citizenship 
and of the marriage. (Section 1994 of the Revised Statutes.) 

Citizenship by Act or Congress or Treaty 

§ 51.51 Former nationals of Spain or Denmark. 

Former nationals of Spain or Denmark who acquired nationality 
or citizenship of the United States under an act of Congress or treaty 
by virtue of residence in territory under the sovereignty of the United 
States shall submit evidence of their former nationality and of their 
residence in such territory. 



124 

§ 51.52 Citizenship by birth in territory under sovereignty of the 
United States. 

A person claiming nationality or citizenship of the United States 
under an act of Congress or treaty by virtue of his birth in territory 
under the sovereignty of the United States shall submit evidence of 
his birth in such territory. 

§ 51.53 Proof of resumption of U.S. citizenship. 

An applicant who claims that he resumed U.S. citizenship or was 
repatriated under any of the nationality laws of the United States 
shall submit with the application a certificate of naturalization, a cer- 
tificate of repatriation or evidence of the fact that he took an oath of 
allegiance in accordance with the applicable provisions of the law. (Act 
of June 29, 1906, as amended by Act of May 9, 1918 ; Act of June 25, 
1936, as amended by Act of July 2, 1940, sections 317(b) and 323 of 
the Nationality Act of 1940 as amended by Acts of April 2, 1942, and 
August 7, 1946; Act of August 16, 1951, as amended by section 402 (j) 
of the Immigration and Nationality Act of 1952 ; sections 324 and 327 
of the Immigration and Nationality Act of 1952 ; Act of July 20, 1954.) 

§ 51.54 Requirement of additional evidence of U.S. citizenship. 

Nothing contained in §§ 51.43 through 51.53 shall prohibit the De- 
partment from requiring an applicant to submit other evidence deemed 
necessary to establish his U.S. citizenship or nationality. 

§ 51.55 Return or retention of evidence of citizenship. 

The passport issuing office will generally return to the applicant evi- 
dence submitted in connection with an application for passport facil- 
ities. However, the passport issuing office may retain evidence when it 
deems necessary. 

Subpart D— Fees 

§ 51.60 Form of remittance. 

Passport fees in the United States shall be paid in U.S. currency or 
by draft, check, or money order payable to the Department of State 
or the Passport Office. Passport fees abroad shall be paid in U.S. 
currency, travelers checks, money order, or the equivalent value of the 
fees in local currency. 

[Dept. Reg. 108.541, 31 F.R. 13537, October 20, 1966, as amended at 
31 F.R. 14522, November 11, 1966] 

§ 51.61 Statutory fees. 

Except as provided in § 51.63, (a) the fee for a U.S. passport is $10; 
(b) the execution fee for a U.S. passport is $3, which shall be remitted 
to the U.S. Treasury where an application is executed before a Federal 
official but which may be collected and retained by any State official 
before whom an application is executed ; (c) the passport fee of $10 
shall be paid by all applicants for a passport. The execution fee of $3 
shall be paid only when an application is executed under oath or affir- 
mation before an official designated by the Secretary for such purpose. 

TDept. Reg. 108.594, 33 F.R. 12048, Aug. 24, 1968, as amended at Dept. 
Reg. 108.704, 39 F.R. 32984, September 9, 1974] 



125 

§ 51.62 Regulatory fees. 

The Secretary may authorize the collection of additional fees in con- 
nection with passport services. Upon publication of the fees in the 
Federal Register, the passport issuing office may collect them in the 
same manner as statutory fees. 

§ 51.63 Exemption from payment of passport or execution fee. 

(a) The following persons are exempt from the payment of passport 



(1) An officer or employee of the U.S. proceeding abroad on official 
business, or the members of his immediate family authorized to accom- 
pany or reside with him abroad. The applicant shall submit evidence 
of the official purpose of his travel and if applicable his authorization 
to have dependents accompany or reside with him abroad. 

(2) An American seaman who requires a passport in connection 
with his duties aboard an American flag-vessel. 

(3) A widow, child, parent, brother, or a sister of a deceased 
American serviceman proceeding abroad to visit the grave of such 
servicemen. 

(4) An employee of the United Seamen's Service who requires a 
passport for travel to assume or perform duties thereof. The applicant 
shall submit with his application a letter from the United Seamen's 
Service certifying that he is proceeding abroad on official business to 
provide facilities and services for U.S. merchant seamen. 

(b) No person described in subparagraph (1), (2), (3), or (4) of 
paragraph (a) of this section shall be required to pay an execution fee 
when his application is executed before a Federal official. 
[Dept. Reg. 108.594, 33 F.R. 12043, August 24, 1968, as amended at 
Dept. Reg. 108.656, 37 F.R. 6053, March 24, 1972] 

§ 51.64 Refunds. 

A collected passport fee shall be refunded : 

(a) To any person exempt from the payment of passport fees under 
§ 51.63 from whom fees were erroneously collected. 

(b) To any person refused a visa within the United States by the 
appropriate officer of a foreign government, provided that the unused 
passport is returned and a written request for a refund is made within 
6 months of the date of issue of the passport. 

( c) To any applicant whose passport is not issued. 

(d) To the executor or administrator of the estate of the deceased 
bearer of an unused passport. 

[Dept. Reg. 108.594, 33 F.R. 12043, Aug. 24, 1968] 

§ 51.65 Replacement passports. 

A passport issuing office shall issue a replacement passport without 
payment of a fee : 

(a) To correct an error or rectify a mistake of the Department. 

(b) When exceptional circumstances exist as determined by the 
Secretary. 

§ 51.66 Execution fee not refundable. 

The fee for the execution of a passport application cannot be re- 
funded. 



126 

Subpart E — Limitations on Issuance or Extension of Passports 3 

§ 51.70 Denial of passports. 

(a) A passport, except for direct return to the United States, shall 
not be issued in any case in which : 

(1) The applicant is the subject of an outstanding Federal warrant 
of arrest for a felony, including a warrant issued under the Federal 
Fugitive Felon Act (18 U.S.C. 1073) ; or 

(2) The applicant is subject to a court order, or conditions of 
parole, or conditions of probations forbidding his departure from the 
United States ; or 

(3) The applicant is subject to a court order committing him to a 
mental institution. 

(4) The applicant is the subject of a request for extradition or provi- 
sional arrest for extradition which has been presented to the gov- 
ernment of a foreign country. 

(5) The applicant is the subject of a subpoena issued pursuant to 
section 1783 of Title 28, United States Code, in a matter involving 
Federal prosecution for, or grand jury investigation of, a felony. 

(6) The applicant has not repaid a loan received from the United 
States as prescribed under § 71.10 and § 71.11 of this Chapter. 

(b) A passport may be refused in any case in which : 

(1) The applicant has not repaid a loan received from the United 
States to effectuate his return from a foreign country in the course of 
travel abroad ; or 

(2) The applicant has been legally declared incompetent unless 
accompanied on his travel abroad by the guardian or other person 
responsible for the national's custody and well-being; or 

(3) The applicant is under the age of 18 years, unmarried and not 
in the military service of the United States unless a person having 
legal custody of such national authorizes issuance of the passport and 
agrees to reimburse the United States for any monies advanced by the 
United States for the minor to return to the United States. 

(4) The Secretary determines that the national's activities abroad 
are causing or are likely to cause serious damage to the national security 
or the foreign policy of the United States ; or 

(5) The applicant has been the subject of a prior adverse action 
under this section or § 51.71 and has not shown that a change in cir- 
cumstances since the adverse action warrants issuance of a passport. 

(6) The applicant is subject to an order of restraint or apprehension 
issued by an appropriate officer of the Armed Forces of the United 
States pursuant to chapter 47 of title 10 of the United States Code. 
[Dept. Reg. 108.583, 33 F.R. 5681, Apr. 12, 1968, as amended by Dept. 
Reg. 108.590, 33 F.R. 10281, July 18, 1968 ; Dept. Reg. 108.594, 33 F.R. 
12043, Aug. 24, 1968; Dept. Reg. 108.634, 36 F.R. 4870, March 13, 
1971 ; Dept. Reg. 108.700, 39 F.R. 18766, effective May 31, 1974; Dept. 
Reg. 108.748, 42 F.R. 60140, November 25, 1977] 

•Ah amended at Dept. Reg. 108,594, 33 F.R. 12043, August 24, 1068; and Dept Reg. 
108,700, 39 P.R. 18766, effective May 31, 1974. 



127 

§51.71 Revocation or restriction of passports. 4 

A passport may be revoked, restricted or limited where : 

(a) The national would not be entitled to issuance of a new pass- 
port under § 51.70 ; or 

(b) The passport has been obtained by fraud, or has been fraudu- 
lently altered, or has been fraudulently misused ; or 

§51.72 Passports invalid for travel into or through restricted 
areas. 

Upon determination by the Secretary that a country or area is : 

(a) A country with which the United States is at war, or 

(b) A country or area where armed hostilities are in progress, or 

(c) A country or area to which travel must be restricted in the na- 
tional interest because such travel would seriously impair the conduct 
of U.S. foreign affairs. 

U.S. passports shall cease to be valid for travel into or through such 
country or area unless specifically validated therefor. Any determina- 
tion made under this section shall be published in the Federal Register 
along with a statement of the circumstances requiring the restriction. 
Unless limited to a shorter period, any such restriction shall expire at 
the end of 1 year from the date of publication of such notice in the 
Federal Register, unless extended or sooner revoked by the Secretary 
by public notice. 
TDept. Reg. 108.583, 33 F.R. 5681, Apr. 12, 1968] 

§51.73 Special validation of passport for travel to restricted 
areas. 

(a) An application of a U.S. national for validation of his passport 
for travel to, in or through a restricted country or area will be con- 
sidered only when such action is determined to be in the national 
interest of the United States. 

(b) An application will be considered to be in the national interest 
of the United States if : 

(1) The applicant is a professional reporter, the purpose of whose 
trip is to obtain, and make available to the public, information about 
the restricted area ; or 

(2) The applicant is a doctor or scientist in the field of medicine or 
public health, the purpose of whose trip is directly related to his pro- 
fessional responsibilities; or 

(3) The applicant is a scholar with a postgraduate degree, or its 
equivalent, the purpose of whose trip is to obtain for public dissemina- 
tion, further information in his field of research ; or 

(4) The applicant is a representative of the American Red Cross. 

(c) In the discretion of the Secretary, an application may be con- 
sidered to be in the national interest of the United States, depending 
upon the restricted area to be visited, the benefit to the United States 
of such a visit, and the applicant's need to visit the restricted area, if : 

4 For amendment of Sec. 51.71 by deletion of former paragraph (c), effective February 28, 
1974, see 39 F.R. 6C96. Former paragraph (c) read as follows : "(c) The national's activities 
abroad are in violation of the laws of the United States." 



128 

(1) The applicant, although not a reporter by profession, establishes 
that one of the news media has indicated an interest in publishing a 
report of the applicant's trip ; or 

(2) The applicant's activities in cultural, athletic, commercial, edu- 
cational, professional, or other fields or in public affairs demonstrate 
that his visit to the restricted area would be of benefit to the United 
States ; or 

(3) The applicant establishes that his trip is justified by compelling 
humanitarian considerations. 

(d) An application for validation of a passport for travel to a re- 
stricted area must be accompanied by evidence that the applicant falls 
within paragraph (b) or (c) of this section or would otherwise serve 
the national interest of the United States. 

§ 51.75 Notification of denial or withdrawal of passport. 

Any person whose application for issuance of a passport has been 
denied, or who has otherwise been the subject of an adverse action 
taken on an individual basis with respect to his right to receive or use 
a passport shall be entitled to notification in writing of the adverse 
action. The notification shall set forth the specific reasons for the 
adverse action and the procedures for review available under §§ 51.81- 
51.105. 

[Dept. Keg. 108.594, 33 F.R. 12043, Aug. 24, 1968] 
§ 51.76 Surrender of passport. 

The bearer of a passport which is revoked shall surrender it to the 
Department or its authorized representative upon demand and upon 
his refusal to do so such passport may be invalidated by notifying the 
bearer in writing of the invalidation. 

Subpart F— -Procedures for Review of Adverse Action 

§ 51.80 Applicability of §§ 51.81—51.105. 

The provisions of §§ 51.81 — 51.105 apply to any action of the Sec- 
retary taken on an individual basis in denying, restricting, revoking, 
or invalidating a passport or in any other way adversely affecting the 
ability of a person to receive or use a passport except action taken by 
reason of noncitizenship or refusal to grant a discretionary excep- 
tion from geographical limitations of general applicability. The pro- 
visions of this subpart shall constitute the administrative remedies 
provided by the Department to persons who are the subject of ad- 
verse action under § 51.70 or § 51.71. 

[Dept. Reg. 108.583, 33 F.R. 5681, Apr. 12, 1968] 

§ 51.81 Time limits on hearing to review adverse action. 

A person who has been the subject of an adverse action with respect 
to his right to receive or use a passport shall be entitled, upon request 
made within 60 days after receipt of notice of such adverse action, to 
require the Department or the appropriate Foreign Service post, as 
the case may be, to establish the basis for its action in a proceeding 
before a hearing officer. If no such request is made within 60 days, the 
adverse action will be considered final and not subject to further ad- 
ministrative review. If such request is made within 60 days, the ad- 






129 

verse action shall be automatically vacated unless such proceeding is 
initiated by the Department or the appropriate Foreign Service post, 
as the case may be, within 60 days after request, or such longer period 
as is requested by the person adversely affected and agreed to by the 
hearing officer. 

§ 51.82 Notice of hearing. 

The person adversely affected shall receive not less than 5 business 
days' notice in writing of the scheduled date and place of the hearing. 

§ 51.83 Functions of the hearing officer. 

The hearing officer shall act on all requests for review under § 51.81. 
He shall make findings of fact and submit recommendations to the 
Administrator of the Bureau of Security and Consular Affairs. In 
making his findings and recommendations, the hearing officer shall not 
consider confidential security information is made available to the 
person adversely affected and is made part of the record of the hearing. 

§ 51.84 Appearance at hearing. 

The person adversely affected may appear at the hearing in person 
or with his attorney, or by his attorney. The attorney must possess 
the qualifications prescribed for practice before the Board of Ap- 
pellate Review or be admitted to practice before the courts of the coun- 
try in which the hearing is to be held. 
[Dept. Reg. 108.637, 36 F.R. 9068, May 19, 1971] 
§ 51.85 Proceedings before the hearing officer. 

The person adversely affected may appear and testify in his own 
behalf and may himself, or by his attorney, present witnesses and 
offer other evidence and make argument. If any witness whom the per- 
son adversely affected wishes to call is unable to appear in person, the 
hearing officer may, in his discretion, accept an affidavit by the witness 
or order evidence to be taken by deposition. The person adversely 
affected shall be entitled to be informed of all the evidence before the 
hearing officer and of the source of such evidence, and shall be en- 
titled to confront and cross-examine any adverse witness. The person 
shall, upon request by the hearing officer, confirm his oral statements 
in an affidavit for the record. 

§ 51.86 Admissibility of evidence. 

The person adversely affected and the Department may introduce 
such evidence as the hearing officer deems proper. Formal rules of evi- 
dence shall not apply, but reasonable restrictions shall be imposed as 
to relevancy, competency and materiality of evidence presented. 

§ 51.87 Privacy of hearing. 

The hearing shall be private. There shall be present at the hearing 
only the person adversely affected, his attorney, the hearing officer, of- 
ficial stenographers, employees of the Department directly con- 
cerned with the presentation of the case, and the witnesses. Witnesses 
shall be present at the hearing only while actually giving testimony or 
when otherwise directed by the hearing officer. 

§ 51.88 Transcript of hearing. 

A complete verbatim stenographic transcript shall be made of the 
\earing by a qualified reporter, and the transcript shall constitute a 



130 

permanent part of the record. Upon request, the appellant or his 
counsel shall be entitled to inspect the complete transcript and to pur- 
chase a copy thereof. 

§ 51.89 Decision of Administrator of the Bureau of Security and 
Consular Affairs. 

The person adversely affected shall be promptly notified in writing 
of the decision of the Administrator of the Bureau of Security and 
Consular Affairs and, if the decision is adverse to him, the notification 
shall state the reasons for the decision and inform him of his right to 
appeal to the Board of Appellate Review under § 51.90. 

[Dept. Reg. 108.574, 32 F.R. 16259, Nov. 29, 1967] 

§ 51.90 Time limit on appeal to Board of Appellate Review. 

A person who has been subject of an adverse decision under § 51.89 
shall be entitled, upon request made within 30 days after the receipt of 
notice of such decision, to appeal the decision to the Board of Appellate 
Review. If no appeal is made within 30 days, the decision will be con- 
sidered final and not subject to further administrative review. 

[Dept. Reg. 108.574, 32 F.R. 16259, Nov. 29, 1967] 

§ 51.91 Composition of the Board of Appellate Review in Pass- 
port Cases. 

The Board of Appellate Review (Part 7 of this Title 22) when con- 
sidering an appeal under § 51.90 shall consist of one Regular Member 
and two ad hoc members. The two ad hoc members shall be selected 
from a panel of five officers of the Department designated by the Dep- 
uty Under Secretary of State for Administration. Such officers shall be 
attorneys. 

[Dept. Reg. 108.574, 32 F.R. 16259, Nov. 29, 1967] 

§ 51.92 Chairman. 

One of the members of the Board shall be designated by the Deputy 
Under Secretary of State for Administration as Chairman. The Chair- 
man shall insure that there is a quorum, including himself or his desig- 
nee, to hear an appeal. The Chairman or his designee shall preside at 
all hearings of the Board and shall be empowered in all respects to 
regulate the conduct of the hearing and to pass on all issues relating 
thereto. The Chairman or his designee shall be empowered to admin- 
ister oaths and affirmations. 

[Dept. Reg. 108.574, 32 F.R. 16259, Nov. 29, 1967] 
§ 51.94 Functions of the Board. 

The Board shall act on all appeals under § 51.90 and shall take any 
action necessary and proper to the disposition of the cases appealed 
to it. The Board may adopt and make public rules of procedure ap- 
proved by the Secretary. 

[Dept Reg. 108.574, 32 F.R. 16259, Nov. 29, 1967] 
§ 51.95 Scope of review on appeal. 

In hearing an appeal, the Board shall review the record of the 
hearing held under §§ 51.81-51.89. The Board shall not receive or con- 
sider evidence or testimony not presented at that hearing unless it shall 



131 

determine that such evidence or testimony could not, by reasonable 
diligence, have been presented at the hearing. In reaching its decision, 
the Board shall not take into consideration any confidential security 
information which is not part of the record. 

§ 51.96 Notice of hearing on appeal. 

An appellant shall receive not less than 5 business days' notice in 
writing of the scheduled date and place of any hearing on his appeal, 
which shall be set for a time as soon as possible after receipt by the 
Board of the appeal. Hearings will be held at the Department of State 
in Washington, D.C., unless the Board determines otherwise. 

§ 51.97 Appearance at hearing on appeal. 

Any party to any proceeding before the Board may appear in per- 
son, or by or with his attorney, who must possess the requisite qualifi- 
cations, as hereinafter set forth, to practice before the Board. 

§ 51.98 Appellant's attorney. 

(a) Attorneys at law in good standing who are admitted to practice 
before the Federal courts or before the courts of any State or Terri- 
tory of the United States may practice before the Board. 

(b) No officer or employee of the Department of State whose official 
duties have, in fact, included participation in the investigation, prep- 
aration, presentation, decision or review of the appellant's case shall, 
within two (2) years after the termination of such duties, appear as 
attorney in behalf of the appellant in any case of such nature, nor 
shall any one appear as such attorney in the case if in the course of 
prior government service he has dealt with any aspects of the appel- 
lant's activities relevant to a determination of the case. 

§ 51.99 Proceedings before the Board. 

The record of the hearing held under §§ 51.81-51.89 shall be made 
available to the appellant in connection with his appeal to the Board. 
Subject to the provisions of § 51.95, the appellant and the Passport 
Office may present witnesses and offer other evidence and make argu- 
ment. The appellant and any witnesses appearing before the Board 
may be examined by any member of the Board or by counsel. The ap- 
pellant shall be entitled to be informed of all the evidence before the 
Board and of the source of such evidence, and shall be entitled to con- 
front and cross-examine any adverse witness appearing before the 
Board. 

§ 51.100 Admissibility of evidence on appeal. 

Subject to the provisions of § 51.95, the Passport Office and the ap- 
pellant may introduce such evidence as the Board deems proper. For- 
mal rules of evidence shall not apply, but reasonable restrictions shall 
be imposed as to the relevancy, competency and materiality of evidence 
presented. 

§ 51.101 Privacy of hearing. 

Unless otherwise requested by the person adversely affected, the hear- 
ing shall be private. There shall be present at the hearing only the ap- 
pellant, his counsel, the members of the Board, official stenographers, 
Departmental employees directly concerned with the presentation of 
♦he case, and the witnesses. Witnesses shall be present at the hearing 



132 

only while actually giving testimony or when otherwise directed by 
the Board. 

TDept. Reg. 108.541, 31 F.R. 13537, October 20, 1966, as amended at 
Dept. Reg. 108.574, 32 F.R. 16259, November 29, 1967] 

§ 51.102 Transcript of hearing. 

A complete verbatim stenographic transcript shall be made of the 
hearing by a qualified reporter, and the transcript shall constitute a 
permanent part of the record. Upon request, the appellant or his coun- 
sel shall be entitled to inspect the complete transcript and to purchase 
a copy thereof. 

§ 51.103 Decision of the Board. 

The decision shall be by majority vote, in writing, and shall set out 
with particularity the findings of fact and conclusions of law on which 
it is based. 

§ 51.104 Finality of decision. 

The decision of the Board shall be final unless : 

(a) The Secretary directs the Board to refer the case to him for 
decision ; or 

(b) The Board by majority vote decides to refer its findings and 
conclusions to the Secretary for decision. 

§ 51.105 Notification of appellant. 

The Department's decision shall be promptly communicated in writ- 
ing to the appellant. 

PART 52— MARRIAGES 

Authority: The provisions of this Part 52 issued under sec. 4, 63 
Stat. Ill, as amended ; 22 U.S.C. 2658. 

§ 52.1 Celebration of marriage. 

Foreign Service officers are forbidden to celebrate marriages. 
§ 52.2 Official witness at marriage ceremony. 

(a) Diplomatic representative. A diplomatic representative shall 
not act as an official witness at a marriage ceremony. 

(b) Consular Officer. A consular officer when requested, may act as 
an official witness at a marriage ceremony, in accordance with Title 22 
U.S.C. 1172, provided that one of the contracting parties is a national 
of the United States and provided the consular officer has assured him- 
self, as far as practicable, that the parties have complied with require- 
ments of the applicable law of the place of celebration. 

§ 52.3 Certificate of witness to marriage. 

Whenever a consular officer witnesses a ceremony of marriage he 
shall complete a Certificate of Witness to Marriage form, affix thereto 
the seal of the consulate, certify that the marriage took place in his 
presence, and sign such certificate. 

§ 52.4 Authentication of marriage and divorce documents. 

(a) Whenever a consular officer is requested to authenticate the sig- 
nature of local authorities on a document of marriage when he was not 
a witness to the marriage, he shall include in the body of his certificate 



133 

of authentication the qualifying statement, "For the contents of the 
annexed document, the Consulate (General) assumes no respon- 
sibility." 

(b) A consular officer shall include the same statement in certificates 
of authentication accompanying decrees of divorce. 

§ 52.5 Certification as to marriage laws. 

Although a consular officer may have knowledge respecting the laws 
of marriage, he shall not issue any official certificate with respect to 
such laws. 

PART 53— TRAVEL CONTROL OF CITIZENS OF UNITED 
STATES IN TIME OF WAR OR NATIONAL EMERGENCY 

Authority: The provisions of this Part 53 issued under sec. 215, 66 
Stat. 190, 8 U.S.C. 1185. Proc. 3004, 18 F.R. 489; 3 CFR, 1949-1953 
Comp. 

§ 53.1 Passport requirement. 

Under section 215(b) of the Immigration and Nationality Act (8 
U.S.C. 1185 (b) ), it is unlawful except as otherwise provided for any 
citizen of the United States to depart from or enter, or attempt to de- 
part from or enter, the United States without a valid passport. 

§ 53.2 Exceptions. 

A U.S. citizen is not required to bear a valid passport to enter or de- 
part the United States : 

(a) When traveling directly between parts of the United States as 
defined in § 50.1 of this chapter ; 

(b) When traveling between the United States and any country, 
territory, or island adjacent thereto in North, South or Central Amer- 
ica excluding Cuba; provided, that this exception is not applicable to 
any such person when proceeding to or arriving from a place outside 
the United States for which a valid passport is required under this 
part if such travel is accomplished within 60 days of departure from 
the United States via any country or territory in North, South or 
Central America or any island adjacent thereto ; 

(c) When traveling as a bonafide seaman or air crewman who is 
the holder of record of a valid merchant mariner identification docu- 
ment or air crewman identification card ; 

(d) When traveling as a member of the Armed Forces of the United 
States on active duty ; 

(e) When he is under 21 years of age and is a member of the house- 
hold of an official or employee of a foreign government or of the 
United Nations and is in possession of or included in a foreign pass- 
port; 

(f ) When he is a child under 12 years of age and is included in the 
foreign passport of an alien parent; however, such child will be re- 
quired to provide evidence of his U.S. citizenship when entering the 
United States: 

(g) When the citizen entering the United States presents a card of 
identity and registration issued by a consular office abroad to facilitate 
travel to the United States ; or 



134 

(h) When specifically authorized by the Secretary of State through 
appropriate official channels to depart from or enter the United States, 
as defined in § 50.1 of this chapter. The fee for a waiver of the pass- 
port requirement under this section is $25. 

[Dept. Reg. 108.541, 31 F.R. 13546, October 20, 1966, as amended at 
Dept. Reg. 108.666, 37 F.R. 11459, June 8, 1972] 

§ 53.3 Attempt of a citizen to enter without a valid passport. 

The appropriate officer at the port of entry shall report to the Sec- 
retary of State for the purpose of invoking the waiver provisions of 
§ 53.2(h), any citizen of the United States who attempts to enter the 
United States contrary to the provisions of this part. 

§ 53.4 Optional use of a valid passport. 

Nothing in this part shall be construed to prevent a citizen from us- 
ing a valid passport in a case in which that passport is not required 
by this Part 53, provided such travel is not otherwise prohibited. 






b. Presidential Proclamation 3004, January 17, 1953, 18 F.R. 489 

Control of Persons Leaving or Entering the United States 

By the President of the United States of America 

Whereas section 215 of the Immigration and Nationality Act, en- 
acted on June 27, 1952 (Public Law 414, 82nd Congress; 66 Stat. 163, 
190) 1 authorizes the President to impose restrictions and prohibitions 
in addition to those otherwise provided by that Act upon the departure 
of persons from, and their entry into, the United States when the 
United States is at war or during the existence of any national emer- 
gency proclaimed by the President or, as to aliens, whenever there 
exists a state of war between or among two or more States, and when 
the President shall find that the interests of the United States so 
require ; and 

Whereas the national emergency the existence of which was pro- 
claimed on December 16, 1950, by Proclamation 2914 still exists; and 

Whereas because of the exigencies of the international situation and 
of the national defense then existing Proclamation No. 2523 of No- 
vember 14, 1941, imposed certain restrictions and prohibitions, in 
addition to those otherwise provided by law, upon the departure of 
persons from and their entry into the United States ; and 

Whereas the exigencies of the international situation and of the 
national defense still require that certain restrictions and prohibitions, 
in addition to those otherwise provided by law, be imposed upon the 
departure of persons from and their entry into the United States: 

Now, therefore, I, Harry S. Truman, President of the United States 
of America, acting under and by virtue of the authority vested in me 
by section 215 of the Immigration and Nationality Act and by section 
301 of title 3 of the United States Code, do hereby find and publicly 
proclaim that the interests of the United States require that restric- 
tions and prohibitions, in addition to those otherwise provided by Jaw, 
be imposed upon the departure of persons from and their entry into, 
the United States; and I hereby prescribe and make the following 
rules, regulations, and orders with respect thereto : 

(1) The departure and entry of citizens and nationals of the United 
States from and into the United States, including the Canal Zone, and 
all territory and waters, continental or insular, subject to the juris- 
diction of the United States, shall be subject to the regulations pre- 
scribed by the Secretary of State and published as sections 53.1 to 53.9, 
inclusive, of title 22 of the Code of Federal Regulations. Such regula- 
tions are hereby incorporated into and made a part of this proclama- 
tion ; and the Secretary of State is hereby authorized to revoke, modify, 
or amend such regulations as he may find the interests of the United 
States to require. 

(2) The departure of aliens from the United States, including the 
Canal Zone, and all territory and waters, continental or insular, suh- 

1 For text, see section E, volume I. 

(135) 



136 

ject to the jurisdiction of the United States, shall be subject to the 
regulations prescribed by the Secretary of State, with the concurrence 
of the Attorney General, and published as sections 53.61 to 53.71, in- 
clusive, of title 22 of the Code of Federal Regulations. Such regula- 
tions are hereby incorporated into and made a part of this proclama- 
tion ; and the Secretary of State, with the concurrence of the Attorney 
General, is hereby authorized to revoke, modify, or amend such regu- 
lations as he may find the interests of the United States to require. 

(3) The entry of aliens into the Canal Zone and American Samoa 
shall be subject to the regulations prescribed by the Secretary of State, 
with the concurrence of the Attorney General, and published as sec- 
tions 53.21 to 53.41, inclusive, of title 22 of the Code of Federal Regu- 
lations. Such regulations are hereby incorporated into and made a part 
of this proclamation; and the Secretary of State, with the concur- 
rence of the Attorney General, is hereby authorized to revoke, modify, 
or amend such regulations as he may find the interests of the United 
States to require. 

(4) Proclamation No. 2523 of November 14, 1941, as amended by 
Proclamation No. 2850 of August 17, 1949, is hereby revoked, but 
such revocation shall not affect any order, determination, or decision 
relating to an individual, or to a class of individuals, issued in pursu- 
ance of such proclamations prior to the revocation thereof, and shall 
not prevent prosecution for any offense committed, or the imposition 
of any penalties or forfeitures, liability for which was incurred under 
such proclamations prior to the revocation thereof; and the provi- 
sions of this proclamation, including the regulations of the Secretary 
of State incorporated herein and made a part thereof, shall be in addi- 
tion, to, and shall not be held to revoke, supersede, modify, amend, or 
suspend, any other proclamation, rule, regulation, or order heretofore 
issued relating to the departure of persons from, or their entry into, 
the United States; and compliance with the provisions of this procla- 
mation, including the regulations of the Secretary of State incorpo- 
rated herein and made a part hereof, shall not be considered as ex- 
empting any individual from the duty of complying with the^ provi- 
sions of any other statute, law, proclamation, rule, regulation, or 
order heretofore enacted or issued and still in effect. 

(5) I hereby direct all departments and agencies of the Govern- 
ment to cooperate with the Secretary of State in the execution of his 
authority under this proclamation and any subsequent proclamation, 
rule, regulation, or order issued in pursuance hereof ; and such depart- 
ments and agencies shall upo:^ request make available to the Secretary 
of State for that purpose the services of their respective officials 
and agents. I enjoin upon all officers of the United States charged 
with the execution of the laws thereof the utmost diligence in pre- 
venting violations of section 215 of the Immigration and Nationality 
Act and this proclamation, including the regulations of the Secretary . 
of State incorporated herein and made a part hereof, and in bringing 
to trial and punishment any person violating any provision of that 
section or of this proclamation. 

To the extent permitted by law, this proclamation shall take effect 
as of December 24, 1952. 



137 

In witness whereof, I have hereunto set my hand and caused the 
Seal of the United States of America to be affixed. 

Done at the City of Washington this 17th day of January in the 
year of our Lord nineteen hundred and fifty-three and of the Inde- 
pendence of the United States of America the one hundred and seventy- 
seventh. 
[seal] 

Harry S. Truman. 
By the President : 
Dean Acheson, 

Secretary of State. 



20-039 O - 78 - 10 



4. Regulations of the Secretary of State (Dept. Reg. 108.556), 
22 CFR 3.1 through 3.7, April 28, 1967, 32 F.R. 6569 

Part 3 — Acceptance of Gifts and Decorations From 
Foreign Governments 1 
§ 3.1 Purpose. 

The purpose of this part is to establish uniform basic standards for 
the acceptance of gifts and decorations from foreign governments 
by U.S. Government officers and employees, including members of the 
armed forces, and members of their families. 

§ 3.2 Application of this part. 

This part applies to all persons occupying an office or a position 
in the Executive, Legislative and Judicial branches of the Government 
of the United States. 

§ 3.3 Definitions. 

As used in this part — 

(a) The term "person" includes every person who occupies 
an office or a position in the Government of the United States, 
its territories and possessions, the Canal Zone Government, and 
the Government of the District of Columbia, or is a member of 
the Armed Forces of the United States, or a member of the family 
and household of any such person. For the purpose of this part, 
"member of the family and household" means a relative by blood, 
marriage or adoption who is a resident of the household. 

(b) The term "foreign government" includes every foreign gov- 
ernment and every official, agent, or representative thereof. 

(c) The term "gift" includes any present or thing, other than 
a decoration, tendered by or received from a foreign government. 

(d) The term "decoration" includes any order, device, medal, 
badge, insignia, or emblem tendered by or received from a foreign 
government. 

(e) The term "gift of minimal value" includes any present or 
other thing, other than a decoration, which has a retail value not 
in excess of $50 in the United States. 

(f) The term "outstanding or unusually meritorious perform- 
ance" includes performance of duty by a person determined by 
the appropriate agency to have contributed to an unusually sig- 
nificant degree to the furtherance of good relations between the 
United States and the foreign government tendering the 
decoration. 

(g) The term "special or unusual circumstances" includes any 
circumstances which would appear to make it improper for the 
donee to receive a gift or decoration, and also includes, in some 
instances, the very nature of the gift itself. 



1 See also material dealing with foreign gifts and decorations, section E, volume I. 

(138) 



139 

(h) The term "appropriate agency" means the department, 
agency, office, or other entity in which a person is employed or 
enlisted, or to which he has been appointed or elected. If the donee 
is not so serving, but is a member of the family and household 
of such a person, then the "appropriate agency" is that in which 
the head of the household is serving. 

(i) The term "approval by the appropriate agency" includes 
approval by such person or persons as are duly authorized by 
such agency to give the approval required by these regulations. 

(j) The term "Chief of Protocol" means the Chief of Protocol 
of the Department of State. 

§ 3.4 Release of gifts and decorations on deposit in the Depart- 
ment of State through October 14, 1966. 

Any gift or decoration on deposit with the Department of State on 
the effective date of this part shall, following written application to the 
Chief of Protocol and subsequent approval by the Chief of Protocol 
and the appropriate agency, be released through the appropriate 
agency to the donee or his legal representative. Such donee may also, 
if authorized by the appropriate agency, wear any decoration so re- 
leased. Approval for release will normally be given unless, from the 
special or unusual circumstances involved, it would appear to the 
Chief of Protocol to be improper to release the item. Any gifts or 
decorations not approved for release will become the property of the 
U.S. Government and will be used or disposed of in accordance with 
the provisions of § 3.6. 

§ 3.5 Gifts and decorations received by any person after Octo- 
ber 14, 1966. 

(a) General policy. No person shall request or otherwise encourage 
the tender of a gift or decoration. 

(b) Gifts of minimal value. Subject to individual agency regula- 
tions, table favors, mementos, remembrances, or other tokens bestowed 
at official functions, and other gifts of minimal value received as 
souvenirs or marks of courtesy from a foreign government may be 
accepted and retained by the donee. The burden of proof is upon the 
donee to establish that the gift is of minimal value as defined by this 
part. 

(c) Gifts of more than minimal valve. Where a gift of more than 
minimal value is tendered, the donor should be advised that it is con- 
trary to the policy of the United States for persons in the service 
thereof to accept substantial gifts. If, however, the refusal of such a 
gift would be likely to cause offense or embarrassment to the donor, or 
would adversely affect the foreign relations of the United States, the 
gift may be accepted and shall be deposited with the Chief of Protocol 
for disposal in accordance with the provisions of 5 3.6. 

(d) Decorations. Decorations received which have been tendered in 
recognition of active field service in connection with combat operations, 
or which have been awarded for outstanding or unusually meritorious 
performance, may be accepted and worn by the donee with (1) the 
approval by the appropriate agency and (2) the concurrence of the 
Chief of Protocol. Within the Department of State, the decision as to 
vhether a decoration has been awarded for outstanding or unusually 



140 

meritorious performance will be the responsibility of the supervising 
Assistant Secretary of State or comparable officer for the person in- 
volved. In the absence of approval and concurrence under this para- 
graph, the decoration shall become the property of the United States 
and shall be deposited by the donee with the Chief of Protocol for use 
or disposal in accordance with the provisions of § 3.6. Notwithstanding 
the foregoing, decorations tendered to U.S. military personnel for 
service in Viet-Nam may be accepted and worn as provided by the Act 
of October 19, 1965, Public Law 89-257, 79 Stat. 982. 

§ 3.6 Use or disposal of gifts and decorations which become the 
property of the United States. 

Any gift or decoration which becomes the property of the United 
States under this part may be retained for official use by the appro- 
priate agency with the approval of the Chief of Protocol. Gifts and 
decorations not so retained shall be forwarded to the General Services 
Administration by the Chief of Protocol for transfer, donation, or 
other disposal in accordance with such instructions as may be fur- 
nished by that officer. In the absence of such instructions, such prop- 
erty will be transferred or disposed of by the General Services Admin- 
istration in accordance with the provisions of the Federal Property 
and Administrative Services Act of 1949, 63 Stat. 377, as amended, and 
the Federal Property Management Regulations (41 CFR Ch. 101, Sub- 
chapter H) . Standard Form 120, Report of Excess Personal Property, 
and Standard Form 120A, Continuation Sheet, shall be used in report- 
ing such property, and the Foreign Gifts and Decorations Act of 1966 
shall be cited on the reporting document. Such reports shall be sub- 
mitted to General Services Administration, Region 3, Attention: 
Property Management and Disposal Service, Seventh and D Streets 
SW., Washington, D.C. 20407. 

§ 3.7 Revocation of previous regulations. 

The regulations in this part shall supersede all regulations hereto- 
fore in effect concerning the acceptance of gifts and decorations from 
foreign governments to persons in the service of the United States or 
to members of their families. 2 



8 These regulations became effective October 15, 1966. 



5. Migration and Refugee Assistance 

a. Protocol Relating to the Status of Refugees * (with reservation) 

Done at New York January 31, 1967; accession advised by the Senate of the 
United States of America subject to certain reservations, October 4, 1968; 
accession approved by the President of the United States of America, subject 
to said reservations, October 15, 1968; accession of the United States of 
America deposited with the Secretary-General of the United Nations, with 
the said reservations, November 1, 1968; proclaimed by the President of the 
United States of America November 6, 1968: entered into force with respect 
to the United States of America, November 1, 1968. 

PROTOCOL RELATING TO THE STATUS OF REFUGEES 

The States Parties to the present Protocol, 

Considering that the Convention relating to the Status of Refugee? 
done at Geneva on 28 July 1951 2 (hereinafter referred to as the Con- 
vention) covers only those persons who have become refugees as a 
result of events occurring before 1 January 1951, 

Considering that the new refugee situations have arisen since the 
Convention was adopted and that the refugees concerned may there- 
fore not fall within the scope of the Convention, 

Considering that it is desirable that equal status should be enjoyed 
by all refugees covered by the definition in the Convention irrespective 
oi the dateline 1 January 1951, 

Have agreed as follows : 

Article I 

GENERAL PROVISION 

1. The States Parties to the present Protocol undertake to apply 
articles 2 to 34 3 inclusive to the Convention to refugees as herein- 
after defined. 

2. For the purpose of the present Protocol, the term "refugee" shall, 
except as regards the application of paragraph 3 of this article, mean 
any person within the definition of article 1 of the Convention as if 
the words "As a result of events occurring before 1 January 1951 
and . . ." and the words ". . . as a result of such events", in article 
1A(2) were omitted. 

3. The present Protocol shall be applied by the States Parties hereto 
without any geographic limitation, save that existing declarations 
made by States already Parties to the Convention in accordance with 
article 1B(1) (a) of the Convention, shall, unless extended under arti- 
cle IB (2) thereof, apply also under the present Protocol. 

1 19 UST 6223 ; TIAS 6577. For states which are party to the Protocol, see Dept of 
Stat.- publication. Treaties In Force. For text of reservation, see page 144. See also material 
concerning migration and refugee assistance, section E, volume I. 

■ 189 UNITS 150, Bee page 145. 

3 See pages 147-156. 

(141) 



142 
Article II 

CO-OPERATION OP THE NATIONAL AUTHORITIES WITH THE UNITED NATIONS 

1. The States Parties to the present Protocol undertake to co-operate 
with the Office of the United Nations High Commission for Refugees, 
or any other agency of the United Nations which may succeed it, in 
the exercise of its functions, and shall in particular facilitate its 
duty of supervising the application of the provisions of the present 
Protocol. 

2. In order to enable the Office of the High Commissioner, or any 
other agency of the United Nations which may succeed it, to make 
reports to the competent organs of the United Nations, the States Par- 
ties to the present Protocol undertake to provide them with the infor- 
mation and statistical data requested, in the appropriate form, 
concerning : 

(a) The condition of refugees; 

(b) The implementation of the present Protocol ; 

(c) Laws, regulations and decrees which are, or may hereafter be, 
in force relating to refugees. 

Article III 

INFORMATION ON NATIONAL LEGISLATION 

The States Parties to the present Protocol shall communicate to the 
Secretary- General of the United Nations the laws and regulations 
which they may adopt to ensure the application of the present 
Protocol. 

Article IV 

SETTLEMENT OF DISPUTES 

Any dispute between States Parties to the present Protocol which 
relates to its interpretation or application and which cannot be settled 
by other means shall be referred to the International Court of Justice 
at the request of any one of the parties to the dispute. 

Article V 

accession 

The present Protocol shall be open for accession on behalf of all 
States Parties to the Convention and of any other State Member of 
the United Nations or member of any of the specialized agencies or to 
which an invitation to accede may have been addressed by the General 
Assembly of the United Nations. Accession shall be effected by the 
deposit of an instrument of accession with the Secretary-General of 
the United Nations. 

Article VI 

FEDERAL CLAUSE 

In the case of Federal or non-unitary State, the following provi- 
sions shall apply : 

(a) With respect to those articles of the Convention to be applied 
in accordance with article I, paragraph 1, of the present Protocol that 



143 

come within the legislative jurisdiction of the federal legislative au- 
thority, the obligations of the Federal Government shall to this extent 
be the same as those of States Parties which are not Federal States ; 

(b) With respect to those articles of the Convention to be applied 
in accordance with article I, paragraph 1, of the present Protocol that 
come within the legislative jurisdiction of constituent States, prov- 
inces or cantons which are not, under the constitutional system of the 
federation, bound to take legislative action, the Federal Government 
shall bring such articles with a favourable recommendation to the 
notice of the appropriate authorities of States, provinces or cantons at 
the earliest possible moment ; 

(c) A Federal State Party to the present Protocol shall, at the 
request or any other State Party hereto transmitted through the 
Secretary-General of the United Nations, supply a statement of the 
law and practice of the Federation and its constituent units in regard 
to any particular provision of the Convention to be applied in accord- 
ance with article I, paragraph 1, of the present Protocol, showing the 
extent to which effect has been given to that provision by legislative or 
other action. 

Articlb VII 

RESERVATIONS AND DECLARATIONS 

1. At the time of accession, any State may make reservations in 
respect of article IV of the present Protocol and in respect of the appli- 
cation in accordance with article I of the present Protocol of any pro- 
vision of the Convention other than those contained in articles 1, 3, 4, 
16(1) and 33 thereof, provided that in the case of a State Party to the 
Convention reservations made under this article shall not extend to 
refugees in respect of whom the Convention applies. 

2. Keservations made by States Parties to the Convention in accord- 
ance with article 42 thereof shall, unless withdrawn, be applicable in 
relation to their obligations under the present Protocol. 

3. Any State making a reservation in accordance with paragraph 1 
of this article may at any time withdraw such reservation by a commu- 
nication to that eifect addressed to the Secretary-General of the United 
Nations. 

4. Declaration made under article 40, paragraphs 1 and 2, of the 
Convention by a State Party thereto which accedes to the present Pro- 
tocol shall be deemed to apply in respect of the present Protocol, unless 
upon accession a notification to the contrary is addressed by the State 
Party concerned to the Secretary-General of the United Nations. The 
provisions of article 40, paragraphs 2 and 3, and of article 44, para- 
graph 3, of the Convention shall be deemed to apply mutatis mutandis 
to the present Protocol. 

Article VIII 

ENTRY INTO FORCE 

1. The present Protocol shall come into force on the day of deposit of 
the sixth instrument of accession. 

2. For each State acceding to the Protocol after the deposit of the 
sixth instrument of accession, the Protocol shall come into force on the 
date of deposit by such State of its instrument of accession. 



144 
Article IX 

DENUNCIATION 

1. Any State Party hereto may denounce this Protocol at any time 
by a notification addressed to the Secretary-General of the United 
Nations. 

2. Such denunciation shall take effect for the State Party concerned 
one year from the date on which it is received by the Secretary-General 
of the United Nations. 

Article X 

NOTIFICATIONS BY THE SECRETARY-GENERAL OP THE UNITED NATIONS 

The Secretary ^General of the United Nations shall inform the States 
referred to in article V above of the date of entry into force, accessions, 
reservations and withdrawals of reservations to and denunciations of 
the present Protocol, and of declarations and notifications relating 
hereto. 

Article XI 

DEPOSIT IN THE ARCHIVES OF THE SECRETARIAT OP THE UNITED 

NATIONS 

A copy of the present Protocol, of which the Chinese, English, 
French, Russian and Spanish texts are equally authentic, signed by 
the President of the General Assembly and by the Secretary- General 
of the United Nations, shall be deposited in the archives of the Secre- 
tariat of the United Nations. The Secretary-General will transmit 
certified copies thereof to all States Members of the United Nations 
and to the other States referred to in article V above. 



Reservation as Stated in Proclamation 

Whereas the Senate of the United States of America by its 
resolution of October 4, 1968, two-thirds of the Senators present 
concurring therein, did advise and consent to accession to the 
Protocol with the following reservations : 

"The United States of America construes Article 29 of the 
Convention as applying only to refugees who are resident in 
the United States and reserves the right to tax refugees 
who are not residents of the United States in accordance 
with its general rules relating to nonresident aliens." 

"The United States of America accepts the obligation of 
paragraph 1(b) of Article 24 of the Convention except in- 
sofar as that paragraph may conflict in certain instances 
with any provision of title II (old age, survivors' and dis- 
ability insurance) or title XVIII (hospital and medical in- 
surance for the aged) of the Social Security Act. As to any 
such provision, the United States will accord to refugees 
lawfully staying in its territory treatment no less favorable 
than is accorded aliens generally in the same circumstances." 



b. Convention Relating to the Status of Refugees 1 
Done at Genera, July 28, 1951 

Preamble 
The High Contracting Parties, 

Considering that the Charter of the United Nations and the Uni- 
versal Declaration of Human Rights approved on 10 December 1948 
by the General Assembly have affirmed the principle that human 
beings shall enjoy fundamental rights and freedoms without discrimi- 
nation, 

Considering that the United Nations has, on various occasions, 
manifested its profound concern for refugees and endeavored to assure 
refugees the widest possible exercise of these fundamental rights and 
freedoms, 

Considering that it is desirable to revise and consolidate previous 
international agreements relating to the status of refugees and to ex- 
tend the scope of and the protection accorded by such instruments by 
means of a new agreement, 

Considering that the grant of asylum may place unduly heavy 
burdens on certain countries, and that a satisfactory solution of a 
problem of which the United Nations has recognized the international 
scope and nature cannot therefore be achieved without international 
co-operation, 

Expressing the wish that all States, recognizing the social and 
humanitarian nature of the problem of refugees, will do everything 
within their power to prevent this problem from becoming a cause of 
tension between States, 

Noting that the United Nations High Commissioner for Refugees 
is charged with the task of supervising international conventions pro- 
viding for the protection of refugees, and recognizing that the effective 
co-ordination of measures taken to deal with this problem will depend 
upon the co-operation of States with the High Commissioner. 

Have agreed as follows : 

Chapter I 

GENERAL PROVISIONS 

Article 1 

Definition of the Term "Refugee" 

A. For the purposes of the present Convention, the term "refugee" 
shall apply to any person who : 

(1) Has been considered a refugee under the Arrangements of 12 

1 1!) UST 0200; TIAS 0577. The United States is not a party to this Convention. How- 
ever, the I'.s. is a party to the Protocol Relating to tho Status of Refugees (page 141) 
which incorporates Articles 2 through 34 of this Convention. See also material concerning 
migration and refugee assistance, section E, volume I. 

(145) 



146 

May 1926 2 and 30 June 1928 s or under the Conventions of 28 October 
1933 * and 10 February 1938, 5 the Protocol of 14 September 1939 6 
or the Constitution of the International Refugee Organization ; 7 

Decisions of non-eligibility taken by the International Refugee 
Organization during the period of its activities shall not prevent the 
status of refugee being accorded to persons who fulfill the conditions of 
paragraph 2 of this section ; 

(2) As a result of events occurring before 1 January 1951 and owing 
to well-founded fear of being persecuted for reasons of race, religion, 
nationality, membership of a particular social group or political opin- 
ion, is outside the country of his nationality and is unable or, owing 
to such fear, is unwilling to avail himself of the protection of that 
country ; or who, not having a nationality and being outside the coun- 
try of his former habitual residence as a result of such events, is un- 
able or, owing to such fear, is unwilling to return to it. 

In the case of a person who has more than one nationality, the term 
"the country of his nationality" shall mean each of the countries of 
which he is a national, and a person shall not be deemed to be lacking 
the protection of the country of his nationality if, without any valid 
reason based on well-founded fear, he has not availed himself of the 
protection of one of the countries of which he is a national. 

B. (1) For the purposes of this Convention, the words "events oc- 
curring before 1 January 1951" in article 1, section A, shall be under- 
stood to mean either 

(a) "events occurring in Europe before 1 January 1951"; or 

(b) "events occurring in Europe or elsewhere before 1 January 
1951"; 

and each Contracting State shall make a declaration at the time of 
signature, ratification or accession, specifying which of these meanings 
it applies for the purpose of its obligations under this Convention. 
(2) Any Contracting State which has adopted alternative (a) may 
at any time extend its obligations by adopting alternative (b) by 
means of a notification addressed to the Secretary-General of the 
United Nations. 

C. This Convention shall cease to apply to any person falling under 
the terms of section A if : 

(1) He has voluntarily re-availed himself of the protection of 
the country^ of his nationality ; or 

(2) Having lost his nationality, he has voluntarily reacquired 
it; or 

(3) He has acquired a new nationality, and enjoys the protec- 
tion of the country of his new nationality ; or 

(4) He has voluntarily re-established himself in the country 
which he left or outside which he remained owing to fear of per- 
secution ; or 

(5) He can no longer, because the circumstances in connexion 
with which he has been recognized as a refugee have ceased to 
exist, continue to refuse to avail himself of the protection of the 
country of his nationality ; 

8 89 LNTS 47. 

• 89 LNTS 63. 

• 159 LNTS 199. 

• 192 LNTS 59. 

• 198 LNTS 141. 

• TIAS 1846 ; 62 Stat. (3) 8037. 



147 

Provided that this paragraph shall not apply to a refugee falling 
under section A(l) of this article who is able to invoke compelling 
reasons arising out of previous persecution for refusing to avail himself 
of the protection of the country of nationality ; 

(6) Being a person who has no nationality he is, because the circum- 
stances in connexion with which he has been recognized as a refugee 
have ceased to exist, able to return to the country of his former habitual 
residence ; 

Provided that this paragraph shall not apply to a refugee falling 
under section A(l) of this article who is able to invoke compelling 
reasons arising out of previous persecution for refusing to return to 
the country of his former habitual residence. 

D. This Convention shall not apply to persons who are at present 
receiving from organs or agencies of the United Nations other than 
the United Nations High Commissioner for Refugees protection or 
assistance. 

When such protection or assistance has ceased for any reason, with- 
out the position of such persons beinc definitively settled in accordance 
with the relevant resolutions adopted by the General Assembly of the 
United Nations, these persons shall ipso facto be entitled to the benefits 
of this Convention. 

E. This Convention shall not apply to a person who is recognized 
by the competent authorities of the country in which he has taken 
residence as having the rights and obligations which are attached to 
the possession of the nationality of that country. 

F. The provisions of this Convention shall not applv to any person 
with respect to whom there are serious reasons for considering that : 

(a) he has committed a crime against peace, a war crime, or a crime 
acrainst humanitv. as defined in the international instruments 
drawn up to make provision in respect of such crimes; 

(b) he has committed a serious non-political crime outside the 
country of refug? prior to his admission to that country as a 
refugee ; 

(r) he has boon guiltv of acts contrary to the purposes and prin- 
ciples of the United Nations. 

Article 2 

General Obligations 

Every refucee has duties to the country in which he finds himself, 
which require in particular that he conform to its laws and regulations 
as well as to measures taken for the maintenance of public order. 

Article 3 

Non-discrimination 

The Contracting States shall apply the provisions of this Conven- 
tion to refugees without discrimination as to race, religion or country 
of origin. 



148 

Article 4 

Religion 

The Contracting States shall accord to refugees within their terri- 
tories treatment at least as favourable as that accorded to their na- 
tionals with respect to freedom to practice their religion and freedom 
as regards the religious education of their children. 

Article 5 

Rights granted apart from this Convention 

Nothing in this Convention shall be deemed to impair any rights 
and benefits granted by a Contracting State to refugees apart from this 
Convention. 

Article 6 

The Term u vn the same circumstances" 

For the purpose of this Convention, the term "in the same circum- 
stances" implies that any requirements (including requirements as to 
length and conditions of sojourn or residence) which the particular in- 
dividual would have to fulfil for the enjoyment of the right in ques- 
tion, if he were not a refugee, must be fulfilled by him, with the excep- 
tion of requirements which by their nature a refugee is incapable of 
fulfilling. 

Article 7 

Exemption from Reciprocity 

1. Except where this Convention contains more favourable provi- 
sions, a Contracting State shall accord to refugees the same treatment 
as is accorded to aliens generally. 

2. After a period of three years' residence, all refugees shall enjoy 
exemption from legislative reciprocity in the territory of the Con- 
tracting States. 

3. Each Contracting State shall continue to accord to refugees the 
rights and benefits to which they were already entitled, in the absence 
of reciprocity, at the date of entry into force of this Convention for 
that State. 

4. The Contracting States shall consider favourably the possibility 
of according to refugees, in the absence of reciprocity, rights and ben- 
efits beyond those to which they are entitled according to paragraphs 
2 and 3, and to extending exemption from reciprocity to refugees who 
do not fulfil the conditions provided for in paragraphs 2 and^ 3. 

5. The provisions of paragraphs 2 and 3 apply both to the rights and 
benefits referred to in articles 13, 18, 19, 21 and 22 of this Convention 
and to rights and benefits for which this Convention does not provide. 

Article 8 

Exemption from Exceptional Measures 

With regard to exceptional measures which may be taken against 
the person, property or interests of nationals of a foreign State, the 
Contracting States shall not apply such measures to a refugee who is 



149 

formally a national of the said State solely on account of such nation- 
ality. Contracting States which, under their legislation, are prevented 
from applying the general principle expressed in this article, shall, in 
appropriate cases, grant exemptions in favour of such refugees. 

Article 9 

Provisional Measures 

Nothing in this Convention shall prevent a Contracting State, in 
time of war or other grave and exceptional circumstances, from taking 
provisionally measures which it considers to be essential to the na- 
tional security in the case of a particular person, pending a determi- 
nation by the Contracting State that that person is in fact a refugee 
and that the continuance of such measures is necessary in his case in 
the interests of national security. 

Article 10 

Continuity of Residence 

1. Where a refugee has been forcibly displaced during the Second 
World War and removed to the territory of a Contracting State, and 
is resident there, the period of such enforced sojourn shall be consid- 
ered to have been lawful residence within that territory. 

2. Where a refugee has been forcibly displaced during the Second 
World War from the territory of a Contracting State and has, prior 
to the date of entry into force of this Convention, returned there for 
the purpose of taking up rosi donee, the period of residence before and 
after such enforced displacement shall be regarded as one uninter- 
rupted period for any purposes for which uninterrupted residence is 
required. 

Article 11 

Refugee Seamen 

In the case of refugees regularly serving as crew members on board 
a ship flying the flag of a Contracting State, that State shall give 
sympathetic consideration to their establishment on its territory and 
the issue of travel documents to them or their temporary admission to 
its territory particularly with a view to facilitating their establish- 
ment in another country. 

Chapter II 

JUKIDICAL STATUS 

Article 12 

Personal Status 

1. The personal status of a refugee shall be governed by the law of 
the country of his domicile or, if he has no domicile, by the law of the 
country of his residence. 



150 

2. Rights previously acquired by a refugee and dependent on per- 
sonal status, more particularly rights attaching to marriage, shall be 
respected by a Contracting State, subject to compliance, if this be 
necessary, with the formalities required! by the law of that State, pro- 
vided that the right in question is one which would have been recog- 
nized by the law of that State had he not become a refugee. 

Article 13 

Movable and Immovable Property 

The Contracting States shall accord to a refugee treatment as fa- 
vourable as possible and, in any event, not less favourable than that 
accorded to aliens generally in the same circumstances, as regards the 
acquisition of movable and immovable property and other rights per- 
taining thereto, and to leases and other contracts relating to movable 
and immovable property. 

Article 14 

Artistic Rights and Industrial Property 

m In respect of the protection of industrial property, such as inven- 
tions, designs or models, trade marks, trade names, and of rights in 
literary, artistic and scientific works, a refugee shall be accorded in 
the country in which he has his habitual residence the same protection 
as is accorded to nationals of that country. In the territory of any other 
Contracting State, he shall be accorded the same protection as is 
accorded in that territory to nationals of the country in which he has 
his habitual residence. 

Article 15 

Right of Association 

As regards non-political and non-profitmaking associations and 
trade unions the Contracting States shall accord to refugees lawfully 
staying in their territory the most favourable treatment accorded to 
nationals of a foreign country, in the same circumstances. 

Article 16 

Access to Courts 

1. A refugee shall have free access to the courts of law on the terri- 
tory of all Contracting States. 

2. A refugee shall enjoy in the Contracting State in which he has 
his habitual residence the same treatment as a national in matters 
pertaining to access to the Courts, including legal assistance and ex- 
emption from cautio judica,tun solvi. 

3. A refugee shall be accorded in the matters referred to in para- 
graph 2 in countries other than that in which he has his habitual 
residence the treatment granted to a national of the country of his 
habitual residence. 



151 

Chapter III 

GAINFUL EMPLOYMENT 

Article 17 
Wage-earning Employment 

1. The Contracting States shall accord to refugees lawfully staying 
in their territory the most favourable treatment accorded to nationals 
of a foreign country in the same circumstances, as regards the right 
to engage in wage-earning employment. 

2. In any case, restrictive measures imposed on aliens or the employ- 
ment of aliens for the protection of the national labour market shall 
not be applied to a refugee who was already exempt from them at the 
date of entry into force of this Convention for the Contracting State 
concerned, or who fulfils one of the following conditions: 

(a) He has completed three years' residence in the country. 

(b) He has a spouse possessing the nationality of the country of 
residence. A refugee may not invoke the benefit of this provi- 
sion if he has abandoned his spouse : 

(c) He has one or more children possessing the nationality of the 
country of residence. 

3. The Contracting States shall give sympathetic consideration to 
assimilating the rights of all refugees with regard to wage-earning 
employment to those of nationals, and in particular of those refugees 
who have entered their territory pursuant to programmes of labour re- 
cruitment or under immigration schemes. 

Article 18 

S 'elf '-employ 'men t 

The Contracting States shall accord to a refugee lawfully in their 
territory treatment as favourable as possible and, in any event, not 
less favourable than that accorded to aliens generally in the same cir- 
cumstances, as regards the right to engage on his own account in agri- 
culture, industry, handicrafts and commerce and to establish com- 
mercial and industrial companies. 

Article 19 

Liberal Professions 

1. Each Contracting State shall accord to refugees lawfully staying 
in their territory who hold diplomas recognized by the competent au- 
thorities of that State, and who are desirous of practising a liberal 

{>rofession. treatment as favourable as possible and. in any event, not 
ess favourable than that accorded to aliens generally in the same 
circumstances. 

2. The Contracting States shall use their best endeavours consist- 
ently with their laws and constitutions to secure the settlement of such 
refugees in the territories, other than the metropolitan territory, for 
whose international relations they are responsible. 



152 

Chapter IV 
WELFARE 

Article 20 

Rationing 

Where a rationing system exists, which applies to the population at 
large and regulates the general distribution of products in short sup- 
ply, refugees shall be accorded the same treatment as nationals. 

Article 21 

Housing 

As regards housing, the Contracting States, in so far as the matter is 
regulated by laws or regulations or is subject to the control of public 
authorities, shall accord to refugees lawfully staying in their territory 
treatment as favourable as possible and, in any event, not less favour- 
able than that accorded to aliens generally in the same circumstances. 

Article 22 
Public Education 

1. The Contracting States shall accord to refugees the same treat- 
ment as is accorded to nationals with respect to elementary education. 

2. The Contracting States shall accord to refugees treatment as fa- 
vourable as possible, and, in any event, not less favourable than that 
accorded to aliens generally in the same circumstances, with respect to 
education other than elementary education and, in particular, as re- 
gards access to studies, the recognition of foreign school certificates, 
diplomas and degrees, the remission of fees and charges and the award 
of scholarships. 

Article 23 

Public Relief 

The Contracting States shall accord to refugees lawfully staying in 
their territory the same treatment with respect to public relief and 
assistance as is accorded to their nationals. 

Article 24 

Labour Legislation and Social Security 

1. The Contracting States shall accord to refugees lawfully staying 
in their territory the same treatment as is accorded to nationals in re- 
spect of the following matters : 

(a) In so far as such matters are governed by laws or regulations or 
are subject to the control of administrative authorities : remu- 
neration, including family allowances where these form part of 
remuneration, hours of work, overtime arrangements, holidays 
with pay, restrictions on home work, minimum age of employ- 



153 

ment, apprenticeship and training, women's work and the work 
of young persons, and the enjoyment of the benefits of collec- 
tive bargaining; 
(b) Social security (legal provisions in respect of employment in- 
jury, occupational diseases, maternity, sickness, disability, old 
age, death, unemployment, family responsibilities and any other 
contingency which, according to national laws or regulations, is 
covered by a social security scheme), subject to the following 
limitations; 
(i) There may be appropriate arrangements for the maintenance 

of acquired rights and rights in course of acquisition ; 
(ii) National laws or regulations of the country of residence may 
prescribe special arrangements concerning benefits or por- 
tions of benefits which are payable wholly out of public 
funds, and concerning allowances paid to persons who do not 
fulfil the contribution conditions prescribed for the award of 
a normal pension. 

2. The right to compensation for the death of a refugee resulting 
from employment injury or from occupational disease shall not be 
affected by the fact that the residence of the beneficiary is outside the 
territory of the Contracting State. 

3. The Contracting States shall extend to refugees the benefits of 
agreements concluded between them, or which may be concluded be- 
tween them in the future, concerning the maintenance of acquired 
rights and rights in the process of acquisition in regard to social se- 
curity, subject only to the conditions which apply to nationals of the 
States signatory to the agreements in question. 

4. The Contracting States will give sympathetic consideration to 
extending to the refugees so far as possible the benefits of similar 
agreements which may at any time be in force between such Contract- 
ing States and noncontracting States. 

Chapter V 

ADMINISTRATIVE MEASURES 

Article 25 

A dm i nistrative Ass is tance 

1. When the exercise of a right by a refugee would normally require 
the assistance of authorities of a foreign country to whom he cannot 
have recourse, the Contracting States in whose territory he is residing 
shall arrange that such assistance be afforded to him by their own 
authorities or by an international authority. 

2. The authority or authorities mentioned in paragraph 1 shall 
deliver or cause to be delivered under their supervision to refugees 
such documents or certifications as would normally be delivered to 
aliens by or through their national authorities. 

3. Documents or certifications so delivered shall stand in the stead 
of the official instruments delivered to aliens by or through their na- 
tional authorities, and shall be given credence in the absence of proof 
to the contrary. 



20-03^ O - 78 - 11 



154 

4. Subject to such exceptional treatment as may be granted to in- 
digent persons, fees may be charged for the services mentioned herein, 
but such fees shall be moderate and commensurate with those charged 
to nationals for similar services. 

5. The provisions of this article shall be without prejudice to articles 
27 and 28. 

Article 26 

Freedom of Movement 

Each Contracting State shall accord to refugees lawfully in its terri- 
tory the right to choose their place of residence and to move freely 
within its territory, subject to any regulations applicable to aliens 
generally in the same circumstances. 

Article 27 

Identity Papers 

The Contracting States shall issue identity papers to any refugee in 
their territory who does not possess a valid travel document. 

Article 28 

Travel Documents 

1. The Contracting States shall issue to refugees lawfully staying in 
their territory travel documents for the purpose of travel outside their 
territory, unless compelling reasons of national security or public 
order otherwise require, and the provisions of the Schedule to this 
Convention shall apply with respect to such documents. The Contract- 
ing States may issue such a travel document to any other refugee in 
their territory ; they shall in particular give sympathetic consideration 
to the issue of such a travel document to refugees in their territory 
who are unable to obtain a travel document from the country of their 
lawful residence. 

2. Travel documents issued to refugees under previous international 
agreements by parties thereto shall be recognized and treated by the 
Contracting States in the same way as if they had been issued pur- 
suant to this article. 

Article 29 

Fiscal Charges 

1. The Contracting States shall not impose upon refugees duties, 
charges or taxes, of any description whatsoever, other or higher than 
those which are or may be levied on their nationals in similar 
situations. 

2. Nothing in the above paragraph shall prevent the application to 
refugees of the laws and regulations concerning charges in respect of 
the issue to aliens of administrative documents including identity 
papers. 



155 

Article 30 
Transfer of Assets 

1. A Contracting State shall, in conformity with its laws and regu- 
lations, permit refugees to transfer assets which they have brought 
into its territory, to another country where they have been admitted 
for the purposes of resettlement. 

2. A Contracting State shall give sympathetic consideration to the 
application of refugees for permission to transfer assets wherever they 
may be and which are necessary for their resettlement in another coun- 
try to which they have been admitted. 

Article 31 
Refugees Unlawfully in the Country of Refuge 

1. The Contracting States shall not impose penalties, on account of 
their illegal entry or presence, on refugees who, coming directly from 
a territory where their life or freedom was threatened in the sense of 
article 1, enter or are present in their territory without authorization, 
provided they present themselves without delay to the authorities and 
show good cause for their illegal entry or presence. 

2. The Contracting States shall not apply to the movements of such 
refugees restrictions other than those which are necessary and such 
restrictions shall only be applied until their status in the country is 
regularized or they obtain admission into another country. The Con- 
tracting States shall allow such refugees a reasonable period and all 
the necessary facilities to obtain admission into another country. 

Article 32 
Expulsion 

1. The Contracting States shall not expel a refugee lawfully in 
their territory save on grounds of national security or public order. 

2. The expulsion of such a refugee shall be only in pursuance of a 
decision reached in accordance with due process of law. Except where 
compelling reasons of national security otherwise require, the refugee 
shall be allowed to submit evidence to clear himself, and to appeal to 
and be represented for the purpose before competent authority or a 
person or persons specially designated by the competent authority. 

3. The Contracting States shall allow such a refugee a reasonable 
period within which to seek legal admission into another country. The 
Contracting States reserve the right to apply during that period such 
internal measures as they may deem necessary. 

Article 33 

Prohibition of Expulsion or Return ("Refoulement") 

1. No Contracting State shall expel or return ("re fouler") a refugee 
in any manner whatsoever to the frontiers of territories where his life 
or freedom would be threatened on account of his race, religion, na- 



156 

tionality, membership of a particular social group or political opinion. 
2. The benefit of the present provision may not, however, be claimed 
by a refugee whom there are reasonable grounds for regarding as a 
danger to the security of the country in which he is, or who, having 
been convicted by a final judgment of a particularly serious crime, con- 
stitutes a danger to the community of that country. 

Article 34 

Naturalization 

The Contracting States shall as far as possible facilitate the assimi- 
lation and naturalization of refugees. They shall in particular make 
every effort to expedite naturalization proceedings and to reduce as 
far as possible the charges and costs of such proceedings. 

Chapter VI 

EXECUTORY AND TRANSITORY PROVISIONS 

Article 35 

Co-operation of the National Authorities with the United Nations 

1. The Contracting States undertake to co-operate with the Office 
of the United Nations High Commissioner for Refugees, or any other 
agency of the United Nations which may succeed it, in the exercise of 
its functions, and shall in particular facilitate its duty of supervising 
the application of the provisions of this Convention. 

2. In order to enable the Office of the High Commissioner or any 
other agency of the United Nations which may succeed it, to make re- 
ports to the competent organs of the United Nations, the Contracting 
States undertake to provide them in the appropriate form with infor- 
mation and statistical data requested concerning : 

(a) the condition of refugees, 

(b) the implementation of this Convention, and 

(c) laws, regulations and decrees which are, or may hereafter be, in 
force relating to refugees. 

Article 36 

Information on National Legislation 

The Contracting States shall communicate to the Secretary-General 
of the United Nations the laws and regulations which they may adopt 
to ensure the application of this Convention. 

Article 37 

Relation to Previous Convention 

Without prejudice to article 28, paragraph 2, of this Convention, this 
Convention replaces, as between parties to it, the Arrangements of 5 



157 

July 1922, 8 31 May 1924. 12 Mav 1926, 30 June 1928 and 30 July 1935, 
the Conventions of 28 October 1*933 and 10 February 1938, the Protocol 
of 14 September 1939 and the Agreement of 15 October 1946. 9 

Chapter VII 

FINAL CLAUSES 

Article 38 

Settlemev t of Disputes 

Any dispute between parties to this Convention relating to its 
interpretation of application, which cannot be settled by other means, 
shall be referred to the International Court of Justice at the request 
of any one of the parties to the dispute. 

Article 39 

Signature, Ratification and Accession 

1. This Convention shall be opened for signature at Geneva on 28 
July 1951 and shall thereafter be deposited with the Secretary-General 
of the United Nations. It shall be open for signature at the European 
Office of the United Nations from 28 July to 31 August 1951 and shall 
be re-opened for signature at the Headquarters of the United Nations 
from 17 September 1951 to 31 December 1952. 

2. This Convention shall be open for signature on behalf of all 
States Members of the United Nations, and also on behalf of any other 
State invited to attend the Conference of Plenipotentiaries on the 
Status of "Refugees and Stateless Persons or to which an invitation to 
sign will have been addressed by the General Assembly. It shall be 
ratified and the instruments of ratification shall be deposited with 
the, Secretary-General of the United Nations. 

3. This Convention shall be open from 28 July 1951 for accession 
by the States referred to in paragraph 2 of this article. Accession shall 
be effected by the deposit of an instrument of accession with the Secre- 
tary-General of the United Nations. 

Article 40 

Territorial Application Clause 

1. Any State may, at the time of signature, ratification or accession, 
declare that this Convention shall extend to all or any of the territories 
for the international relations of which it is responsible. Such a decla- 
ration shall take effect when the Convention enters into force for the 
State concerned. 

2. At any time thereafter any such extension shall be made by noti- 
fication addressed to the Secretary-General of the United Nations 
and shall take effect as from the ninetieth day after the day of receipt 

8 13 LNTR 237. 
•11 UNTS 73. 



158 

by the Secretary-General of the United Nations of this notification, 
or as from the date of entry into force of the Convention for the State 
concerned, whichever is the later. 

3. With respect to those territories to which this Convention is not 
extended at the time of signature, ratification or accession, each State 
concerned shall consider the possibility of taking the necessary steps 
in order to extend the application of this Convention to such terri- 
tories, subject, where necessary for constitutional reasons, to the con- 
sent of the Government of such territories. 

Article 41 

Federal Clause 

_ In the case of a Federal or non-unitary State, the following pro- 
visions shall apply : 

(a) With respect to those articles of this Convention that come 
within the legislative jurisdiction of the federal legislative 
authority, the obligations of the Federal Government shall to 
this extent be the same as those of Parties which are not Federal 
States ; 

(b) With respect to those articles of this Convention that come 
within the legislative jurisdiction of constituent States, prov- 
inces or cantons which are not, under the constitutional system 
of the federation, bound to take legislative action, the Federal 
Government shall bring such articles with a favourable recom- 
mendation to the notice of the appropriate authorities of states, 
provinces or cantons at the earliest possible moment. 

(c) A Federal State Party to this Convention shall, at the request 
of any other Contracting State transmitted through the Secre- 
tary-General of the United Nations, supply a statement of the 
law and practice of the Federation and its constituent units in 
regard to any particular provision of the Convention showing 
the extent to which effect has been given to that provision by 
legislative or other action. 

Article 42 

Reservations 

1. At the time of signature, ratification or accession, any State may 
make reservations to articles of the Convention other than to articles 
1, 3, 4, 16 (1) , 33, 36^6 inclusive. 

2. Any State making a reservation in accordance with paragraph 1 
of this article may at any time withdraw the reservation by a communi- 
cation to that effect addressed to the Secretary- General of the United 
Nations. 

Article 43 

Entry into Force 

1. This Convention shall come into force on the ninetieth day follow- 
ing the day of deposit of the sixth instrument of ratification or 
accession. 



159 

2. For each State ratifying or acceding to the Convention after the 
deposit of the sixth instrument of ratification or accession, the Con- 
vention shall enter into force on the ninetieth day following the date 
of deposit by such State of its instrument of ratification or accession. 

Article 44 

Denunciation 

1. Any Contracting State may denounce this Convention at any time 
by a notification addressed to the Secretary-General of the United 
Nations. 

2. Such denunciation shall take effect for the Contracting State con- 
cerned one year from the date upon which it is received by the Secre- 
tary-General of the United Nations. 

3. Any State which lias made a declaration or notification under 
article 40 may. at any time thereafter, by a notification to the Secre- 
tary-General of the United Nations, declare that the Convention shall 
cease to extend to such territory one year after the date of receipt of 
the notification by the Secretary-General. 

Article 45 

Revision 

1. Any Contracting State may request revision of this Convention 
at any time by a notification addressed to the Secretary-General of 
the United Nations. 

2. The General Assembly of the United Nations shall recommend 
the steps, if any, to he taken in respect of such request. 

Article 46 

Notifications by the Secretary-General of the United Nations 

The Secretary-General of the United Nations shall inform all Mem- 
bers of the United Nations and non-member States referred to in 
article 39 : 

(a) Of declaration and notifications in accordance with section B 

of article 1 ; 
(h) Of signature, ratifications and accessions in accordance with 

article 30; 
(c) Of declarations and notifications in accordance with article 40; 
(//) Of reservations and withdrawals in accordance with article 42; 

(e) Of the dale on which this Convention will come into force in 
accordance with article 43: 

(f) Of denunciations and notifications in accordance with article 
44; 

(o) Of requests for revision in accordance with article 45. 

In faith whereof the undersigned, duly authorized, have signed 
this Convention on behalf of their respective Governments, 

Done at Geneva, this twenty-eighth day of July, one thousand nine 
hundred and fifty-one. in a single copy, of which the English and 
French texts are equally authentic and which shall remain deposited 



160 

in the archives of the United Nations, and certified true copies of 
which shall be delivered to all Members of the United Nations and 
to the non-member States referred to in article 39. 

SCHEDULE 

Paragraph 1 

1. The travel document referred to in article 28 of this Convention 
shall be similar to the specimen annexed hereto. 

2. The document shall be made out in at least two languages, one 
of which shall be English or French. 

Paragraph 2 

Subject to the regulations obtaining in the country of issue, children 
may be included in the travel document of a parent or, in exceptional 
circumstances, of another adult refugee. 

Paragraph S 

The fees charged for issue of the document shall not exceed the low- 
est scale of charges for national passports. 

Paragraph h 

Save in special or exceptional cases, the document shall be made 
valid for the largest possible number of countries. 

Paragraph 5 

The document shall have a validity of either one or two years, at 
the discretion of the issuing authority. 

Paragraph 6 

1. The renewal or extension of the validity of the document is a 
matter for the authority which issued it, so long as the holder has not 
established lawful residence in another territory and resides lawfully 
in the territory of the said authority. The issue of a new document is, 
under the same conditions, a matter for the authority which issued the 
former document. 

2. Diplomatic or consular authorities, specially authorized for the 
purpose, shall be empowered to extend, for a period not exceeding six 
months, the validity of travel documents issued by their Governments. 

3. The Contracting States shall give sympathetic consideration to 
renewing or extending the validity of travel documents or issuing new 
documents to refugees no longer lawfully resident in their territory- 
who are unable to obtain a travel document from the country of their 
lawful residence. 

Paragraph 7 

The Contracting States shall recognize the validity of the docu- 
ments issued in accordance with the provisions of article 28 of this 
Convention. 



161 

Paragraph 8 

The competent authorities of the country to which the refugee de- 
sires to proceed shall, if they are prepared to admit him and if a visa 
is required, affix a visa on the document of which he is the holder. 

Paragraph 9 

1. The Contracting States undertake to issue transit visas to refu- 
gees who have obtained visas for a territory of final destination. 

2. The issue of such visas may be refused on grounds which would 
justify refusal of a visa to any alien. 

Paragraph 10 

The fees for the issue of exit, entry or transit visas shall not exceed 
the lowest scale of charges for visas on foreign passports. 

Paragraph 11 

When a refugee has lawfully taken up residence in the territory of 
another Contracting State, the responsibility for the issue of a new 
document, under the terms and conditions of article 28, shall be that 
of the competent authority of that territory, to which the refugee 
shall be entitled to apply. 

Paragraph 12 

The authority issuing a new document shall withdraw the old doc- 
ument and shall return it to the country of issue if it is stated in the 
document that it should be so returned; otherwise it shall withdraw 
and cancel the document. 

Paragraph IS 

1. Each Contracting State undertakes that the holder of a travel 
document issued by it in accordance with article 28 of this Convention 
shall be readmitted to its territory at any time during the period of its 
validity. 

2. Subject to the provisions of the preceding sub-paragraph, a Con- 
tracting State may require the holder of the document to comply with 
such formalities as may be prescribed in regard to exit from or return 
to its territory. 

3. The Contracting States reserve the right, in exceptional cases, or 
in cases where the refugee's stay is authorized for a specific period, 
when issuing the document, to limit the period during which the refu- 
gee may return to a period of not less than three months. 

Paragraph H 

Subject only to the terms of paragraph 13. the provisions of this 
Schedule in no way affect the laws and regulations governing the con- 
ditions of admission to, transit through, residence and establishment 
in, and departure from, the territories of the Contracting States. 



162 

Paragraph 15 

Neither the issue of the document nor the entries made thereon de- 
termine or affect the status of the holder, particularly as regards 
nationality. 

Paragraph 16 

The issue of the document does not in any way entitle the holder to 
the protection of the diplomatic or consular authorities of the country 
of issue, and does not confer on these authorities a right of protection. 




F. INFORMATION AND EDUCATIONAL AND 
CULTURAL EXCHANGE PROGRAMS 

CONTENTS 

United States, Information and Educational Exchange Related Mate- Pa ? e 
rials 165 

a. Reorganization Plan No. 8 of 1953 (Establishing the USIA)___ 165 

b. Reorganization Plan No. 2 of 1977 (Establishing the Inter- 

national Communication Agency) 166 

Exchange of .Material- and Objects 171 

a. Agreement for Facilitating the International Circulation of 

Visual and Auditory Materials of an Educational, Scientific, 

and Cultural Character (Beirut Agreement of 1949) 171 

b. Agreement on the Importation of Educational, Scientific, and 

Cultural Materials (Florence Agreement) (with reservation) __ 177 



(163) 



1. United States Information and Educational Exchange 
Related Materials 

a. Reorganization Plan No. 8 of 1953 1 

Prepared by the President and transmitted to the Senate and the House of Rep- 
resentatives in Congress assembled, June 1, 1953, pursuant to the provisions 
of the Reorganization Act of 1949, approved June 20, 1949, as amended 



Xote. — Much of Reorganization Plan Xo. 8 of 1953 was super- 
seded by Reorganization Plan No. -2 of 1077. The retained pro- 
visions of the 1953 plan are included below. For text of the 1077 
plan, see page 166. 



United States Information Agency 

Sec. 2. Transfer of functions. — (a) Subject to subsection (c) of 
this section, there are hereby transferred to the Director, (1) the 
functions vested in the Secretary of State by Title V of the United 
States Information and Educational Exchange Act of 1948, as 
amended, and so much of functions with respect to the interchange 
of books and periodicals and aid to libraries and community centers 
under sections 202 and 203 of the said Act as is an integral part of 
information programs under that Act, together with so much of the 
functions vested in the Secretary of State by other provisions of the 
said Act as is incidental to or is necessary for the performance of 
the functions under Title V and sections 202 and 203 transferred by 
this section. 

(b) * * * [Superseded— 1978] 

(c) (1) The Secretary of State shall direct the policy and control 
the content of a program, for use abroad, on official United States 
positions, including interpretations of current events, identified as 
official positions by an exclusive descriptive label. 

(2) The Secretary of State shall continue to provide to the Director 
on a current basis full guidance concerning the foreign policy of the 
United States. 

(d) To the extent the President deems it necessary in order to 
carry out the functions transferred by the foregoing provisions of 
this section, he may authorize the Director to exercise, in relation to 
the respective functions so transferred, any authority or part thereof 
available by law, including appropriation acts, to the Secretary of 
State, the Director for Mutual Security, or the Director of the Foreign 
Operations Administration, in respect of the said transferred func- 
tions. 



l 22 U.S.C. 1461 (note.) 

(105) 



b. Reorganization Plan No. 2 of 1977 x 

Prepared by the President and transmitted to the Senate and the House of 
Representatives in Congress assembled, October 11, 1977, pursuant to the 
provisions of chapter 9 of title 5 of the United States Code. 

INTERNATIONAL COMMUNICATION AGENCY 

Section 1. Establishment of the International Communication 
Agency- 
There is hereby established in the executive branch an agency to be 
known as the International Communication Agency (the "Agency"). 

Section 2. Director 

The Agency shall be headed by a Director (the "Director''), who 
shall serve as the principal advisor to the President, the National Se- 
curity Council, and the Secretary of State on the functions vested in 
the Director. The Director shall report to the President and the Sec- 
retary of State. Under the direction of the Secretary of State, the 
Director shall have primary responsibility within the Government 
for the exercise of the functions vested in the Director. The Director 
shall be appointed by the President, by and with the advice and con- 
sent of the Senate, and shall be entitled to receive compensation at the 
rate now or hereafter prescribed by law for Level II of the Executive 
Schedule. 

Section 3. Deputy Director 

A Deputy Director shall be appointed by the President, by and with 
the advice and consent of the Senate. The Deputy Director shall act 
for, and exercise the powers of, the Director during the Director's 
absence or disability or during a vacancy in said office and, in addi- 
tion, shall perform such duties and exercise such powers as the Di- 
rector may from time to time prescribe. The Deputy Director shall 
be entitled to receive compensation at the rate now or hereafter pre- 
scribed by law for Level III of the Executive Schedule. 

Section 4. Associate Directors 

The President, by and with the advice and consent of the Senate, 
may appoint four Associate Directors, who shall perform such duties 
and exercise such powers as the Director may from time to time 
prescribe, One Associate Director shall be known as the Associate Di- 
rector for Educational and Cultural Affairs and one Associate Direc- 
tor shall be known as the Associate Director for Broadcasting. Each 
Associate Director shall be entitled to receive compensation at the 
rate now or hereafter prescribed by law for Level IV of the Executive 
Schedule. 



1 At the publication date of this volume, this plan was not vet in effect. However, it 
is expected that it will become effective by July 1, 1978. 

(166) 



167 

Section 5. Performance of Functions 

The Director may establish within the Agency bureaus, office?, di- 
visions and other units. The Director may from time to time make 
provision for the performance of any function of the Director by any 
officer, employee or unit of the Agency. 

Section 6. Negotiations 

(a) Under the direction of the Secretary of State, the Director 
shall prepare for, manage and conduct negotiations with representa- 
tives of foreign states or international organizations on matters for 
which responsibility is vested in the Director or in the Agency. 

(b) For the purpose of conducting such negotiations, or for the 
purpose of exercising any other authority voted in the Director or 
in the Agency, the Director may — 

(1) consult and communicate with or direct the consultntion 
and communication with representatives of other nations or of 
international organizations; and 

(2) communicate in the name of the Secretary of State with 
diplomatic representatives of the United States in this country 
and abroad. 

Section 7. Transfer of Functions 

(a) There are hereby transferred to the Director all function- vested 
in the President, the Secretary of State, the Department of State, the 
Director of the United States Information Agency, and the United 
States Information Agency pursuant to the following: 

(1) the United State- Information and Educational Exchange 
Act of 1948, ;i- amended (22 U.S.C. 1431-1479), except to the 
extent that any function in sections 302, 101, or 602 is nested in the 
President ; 

(2) the Mutual Educational and Cultural Exchange Act of 
1961, as amended (22 U.S.C. 2451-2458a), except for: (A) such 
functions as are vested by sections 102(b) (6), 102(b) fin). 104(a), 
104(e)(1). 104(e)(2). "104(f). 104(g), 105(a), 105(b), 105(c), 
100(a), 108; (B) to the extent that su<-h functions were assumed 
to the Secretary of Health. Education, and Welfare immediately 
prior to the effective date of this Reorganization Plan, sections 
104(h). 105(d)(2), 105(f), 106(d), and 106(f); and (C) to the 
extent that any function therein is vested in the President or the 
Secretary of State, sections 100(1)) and 100(c). 

(3) Public Law 00-404 (22 U.S.C. 020-032. 1221-1234) , to the 
extent that Mich functions are vested in the Director of the United 
States Information Agency; 

(4) Sections 522(3), 692(1), and 803(a)(4) of the Eoreiim 
Service Act of 1946, a- amended (22 U.S.C. 022(3) . 1037a (1 ) . and 
1003(a) (4)). to the extent such functions are vested in the Direc- 
tor of the United States Information Agency or in the United 
States Information Asrencv: 

(5) Section 4 of the United States Information Airenev Appro- 
priations Authorization Act of 1073. Public Law 03-168: 

(6) (A) Sections 107(b). 204 and 205 of the Foreign delations 
Authorizations Act. Fiscal Year 107^. Public Law 95^105. 01 Stat. 
844: and ( H) to the extent such functions are vested in the Direc- 



168 

tor of the United States Information Agency, section 203 of the 
Act; 

(7) the Center for Cultural and Technical Interchange Between 
East and West Act of 1960 (22 U.S.C. 2054-2057) ; 

(8) Sections 101(a) (15) (J) and 212(e) of the Immigration 
and Nationality Act (8 U.S.C. 1011(a) (15) (J), 1182(e)) ; 

(9) Section 2(a) (1) of Reorganization Plan No. 8 of 1953 (22 
U.S.C. 1461 note) ; 

(10) Section 3(a) of the Arts and Artifacts Indemnity Act 
(20 U.S.C. 972(a)); 

(11) Section 7 of the Act of June 15, 1951, c.138, 65 Stat, 71 
(50 U.S.C. App. 2316); 

(12) Section 9(b) of the National Foundation on the Arts and 
Humanities Act of 1965 (20 U.S.C. 958(b)), to the extent that 
such functions are vested in the Secretary of State; 

(13) Section 112(a) of the Higher Education Act of 1965 (20 
U.S.C. 1009(a)), to the extent such functions are vested in the 
Department of State ; 

(14) Section 3(b) (1) of the Woodrow Wilson Memorial Act 
of 1968 (20 U.S.C. 80f (b) (1) ) ; 

(15) Section 201 of Public Law 89-665, as amended by section 
201(5) of Public Law 94-422 (16 U.S.C. 470i(a) (9)) ; 

(16) The third proviso in the twenty-third unnumbered para- 
graph of title V of Public Law 95-86 (headed "United States 
Information Agency, Salaries and Expenses"), 91 Stat. 440- 

41; . 

(17) The twentieth unnumbered paragraph of title I of Public 
Law 95-86 (headed "Center for Cultural and Technical 
Interchange Between East and West"), 91 Stat. 424; 

(18) Sections 4(d)(1)(F), 4(f)(1)(F), 4(g)(1)(F), and 
4(h) (1) (F) of the Foreign Service Buildings Act, 1926, as 
amended (22 U.S.C. 295(d)(1)(F), 295(f)(1)(F), 295(g)(1) 
(F), and 295(h)(1)(F)); and 

(19) Sections 1, 2, and 3 of the Act of July 9, 1949, c.301, 63 
Stat. 408 (22 U.S.C. 2681-2683). 

(b) There are hereby transferred to the Director all functions vested 
in the Assistant Secretary of State for Public Affairs pursuant to 
Section 2(a) of the John F. Kennedy Center Act (20 U.S.C. 76h(a) ). 

(c) The Director shall insure that the scholarly integrity and non- 
political character of educational and cultural exchange activities 
vested in the Directors are maintained. 

Section 8. Establishment of the United States Advisory Commis- 
sion on International Communication, Cultural and Educa- 
tional Affairs 

(a) There is hereby established an advisory commission, to be known 
as the United States Advisory Commission on International Com- 
munication, Cultural and Educational Affairs (the "Commission" ).- 
The Commission shall consist of seven members who shall be ap- 
pointed by the President, by and with the advice and consent of the 
Senate. The members of the Commission shall represent the public 
interest and shall be selected from a cross section of educational, 
communications, cultural, scientific, technical, public service, labor 



169 

and business and professional backgrounds. Xot more than four mem- 
ber? shall be from any one political party. The term of each member 
shall be three years except that of the original seven appointments, 
two shall be for a term of one year and two shall be for a term of two 
years. Any member appointed to fill a vacancy occurring prior to 
the expiration of the term for which a predecessor was appointed -hall 
be appointed for the remainder of such term. Upon the expiration of a 
member's term of office, such member may continue to serve until a 
successor is appointed and has qualified. The President shall designate 
a member to chair the Commission. 

(b) The functions now vested in the United States Advisory Com- 
mission on Information and in the United States Advisory Commis- 
sion on International Education and Cultural Affairs under sections 
601 through 603 and ^01(6) of the United States Information and 
Educational Exchange Ad of 1948, as amended (22 U.S.C. 1466-1468, 
1471(0)). and under section- 106(b) and 1^7 of the Mutual Educa- 
tional and Cultural Exchange Act of 1961, as amended (22 U.S.C. 
2456(b), 2457), respectively, are hereby consolidated and vested in 
the Commission, as follows : 

The Commission shall formulate and recommend to the Director, 
the Secretary of State, and the President policies and programs to 
carry out function- vested in the Director or the Agency, and shall 
appraise the effectiveness of policies and programs of the Agency. 
The Commission shall submit to the Congress, the President, the 
Secretary of State and the Director annual reports on programs and 
activities carried on by the Agency, including appraisals, where feasi- 
ble, as to the effectiveness of the several programs. The Commission 
shall also include in such reports such recommendations as shall have 
been made by the Commission to the Director for effectuating the pur- 
poses of the Agency, and the action taken to carry out such recom- 
mendations. The Commission may also submit such other report- to 
the Congress as if deem- appropriate, and shall make reports to the 
public in the United State- and abroad to develop a better understand- 
ing of and support for the programs conducted by the Agency. 
The Commission's reports to the Congress -hall include assessments 
of the degree to which the scholarly integrity and nonpolitical charac- 
ter of the educational and cultural exchange activities vested in the 
Director have been maintained, and ents of the attitude- of 

foreign scholars and governments regarding such activities. 

The Commission shall have no authority with respect to the 
Board of Foreign Scholarships or the United State.- National Com- 
mission for UNESCO. 
Section 9. Abolitions and Supersessions 
(a) The following are hereby abolished: 

(1) The United States Information Agency, including the 
offices of Director. Deputy Director, Deputy Director (Policy and 
Plans) (5 U.S.C. 5316(67)), Associate Director (Policy and 
Plans) (5 U.S.C. 5316(103)), and additional offices created by 
section 1(d) of Reorganization Plan No. 8 of 1953 (HV.^.C. 1461 
note), of the United State- Information Agency, provided that, 
pending the initial appointment of the Director, Deputy Director 
and Associate Directors of the Ajrencv their functions shall be 



20-039 O - 78 - 12 



170 

performed temporarily, but not for a period in excess of sixty 
(60) days, by such officers of the Department of State or of the 
United States Information Agency as the President shall 
designate ; 

(2) One of the offices of Assistant Secretary of State provided 
for in section 1 of the Act of May 26, 1949, c.143, 63 Stat. Ill, as 
amended (22 U.S.C. 2652), and in section 5315(22) of title 5 of 
the United States Code ; 

(3) The United States Advisory Commission on International 
Educational and Cultural Affairs (22 U.S.C. 2456(b) ) ; 

(4) The United States Advisory Commission on Information 
(22 U.S.C. 1466-1468); 

(5) All functions vested in or related to the United States Ad- 
visory Commission on International Educational and Cultural 
Affairs and the United States Advisory Commission on Informa- 
tion that are not transferred to the Director by section 7 or con- 
solidated in the Commission by section 8 of this Reorganization 
Plan; 

(6) The Advisory Committee on the Arts, all functions thereof, 
and all functions relating thereto (22 U.S.C. 2456(c)) ; and 

(7) The functions vested in the Secretary of State by section 
3(e) of the Act of August 1, 1956, c.841, 70* Stat. 890 (22 U.S.C. 
2670(e)). 

(b) Sections 1, 2(a) (2), 2(b), 2(c) (3), 3, 4, and 5 of Reorganiza- 
tion Plan No. 8 of 1953 (22 U.S.C. 1461 note) are hereby superseded. 

Section 10. Other Transfers 

So much of the personnel, property, records, and unexpended bal- 
ances of appropriations, allocations and other funds employed, used, 
held, available, or to be made available in connection with the functions 
transferred or consolidated by this Reorganization Plan, as the Direc- 
tor of the Office of Management and Budget shall determine, shall be 
transferred to the appropriate department, agency, or commission at 
such time or times as the Director of the Office of Management and 
Budget shall provide, except that no such unexpended balances trans- 
ferred shall be used for purposes other than those for which the appro- 
priation was originally made. The Director of the Office of Manage- 
ment and Budget shall provide for terminating the affairs of all 
agencies, commissions, and offices abolished herein and for such further 
measures and dispositions as such Director deems necessary to effectu- 
ate the purposes of this Reorganization Plan. 

Section 11. Effective Date 

This Reorganization Plan shall become effective at such time or 
times, on or before July 1, 1978, as the President shall specify, but 
not sooner than the earliest time allowable under section 906 of title 5 
of the United States Code. 



2. Exchange of Materials and Objects 

a. Agreement for Facilitating the International Circulation of 
Visual and Auditory Materials of an Educational, Scientific and 
Cultural Character (Beirut Agreement of 1949) * 

Agreement and protocol opened for signature at Lake Success July 15, 1949; 
Signed on behalf of the United States of America September 13, 1949; 
Ratification advised by the Senate of the United States of America May 26, 
1960; Ratified by the President of the United States of America Septem- 
ber 30, 1966; Acceptance by the United States of America deposited with 
the Secretary-General of the United Nations October 14, 1966; Proclaimed 
by the President of the United States of America October 14, 1966; Date of 
entry into force with respect to the United States of America January 12, 
1967 

The Governments of the States signatory to the present Agreement, 
Being convinced that in facilitating the international circulation of 
visual and auditory materials of an educational, scientific and cul- 
tural character, the free flow of ideas by word and image will be pro- 
moted and the mutual understanding of peoples thereby encouraged, 
in conformity with the aims of the United Nations Educational, Sci- 
entific and Cultural Organization, 
Have agreed as follows : 

ARTICLE I 

The present Agreement shall apply to visual and auditory materials 
of the types specified in article II which are of an educational, scien- 
tific or cultural character. 

Visual and auditory materials shall be deemed to be of an educa- 
tional, scientific or cultural character : 

(a) When their primary purpose or effect is to instruct or in- 
form through the development of a subject or aspect of a sub- 
ject, or when their content is such as to maintain, increase or 
diffuse knowledge, and augment international understanding and 
good will ; and 

(b) When the materials or representative, authentic, and ac- 
curate ; and 

(c) When the technical quality is such that it does not inter- 
fere with the use made of the material. 

ARTICLE II 

The provisions of the preceding Article shall apply to visual and 
auditory materials of the following types and forms : 

(a) Films, filmstrips and microfilm in either negative form, 
exposed and developed, or positive form, printed and developed ; 

(b) Sound recordings of all types and forms; 

1 17 UST 1578 : TIAS 6116. For a list of states which are parties to the Agreement, see 
Dept. of State publication, Treaties in Force. 

(171) 



172 

(c) Glass slides; models, static and moving; wall charts, maps 
and posters. 
These materials are hereinafter referred to as material. 

article rn 

1. Each of the contracting States shall accord, within six months 
from the coming into force of the present Agreement with respect to 
that State exemption from all Customs duties and quantitative restric- 
tions and from the necessity of applying for an import license in re- 
spect of the importation, either permanent or temporary, of material 
originating in the territory of any of the other contracting States. 

2. Nothing in this Agreement shall exempt material from those 
taxes, fees, charges or exactions which are imposed on the import of 
all articles without exception and without regard to their nature and 
origin, even though such articles are exempt from customs duties ; such 
taxes, fees and exactions shall include, but are not limited to, nominal 
statistical fees and stamp duties. 

3. Material entitled to the privileges provided by paragraph 1 of 
this article shall be exempt, in the territory of the country of entry, 
from all internal taxes, fees, charges or exactions other or higher than 
those imposed on like products of that country, and shall be accorded 
treatment no less favourable than that accorded like products of that 
country in respect of all internal laws, regulations or requirements 
affecting its sale, transportation or distribution or affecting its proc- 
essing, exhibition or other use. 

4. Nothing in this Agreement shall require any contracting State 
to deny the treatment provided for in this article to like material of 
an educational, scientific or cultural character originating in any State 
not a party to this Agreement in any case in which the denial of such 
treatment would be contrary to an international obligation or to the 
commercial policy of such contracting State. 

article rv 

1. To obtain the exemption, provided under the present Agreement 
for material for which admission into the territory of a contracting 
State is sought, a certificate that such material is of an educational, 
scientific or cultural character within the meaning of article I, shall 
be filed in connexion with the entry. 

2. The certificate shall be issued by the appropriate governmental 
agency of the State wherein the material to which the certificate re- 
lates originated, or by the United Nations Educational, Scientific 
and Cultural Organization as provided for in paragraph 3 of this 
article, and in the forms annexed hereto. The prescribed forms of 
certificate may be amended or revised upon mutual agreement of the 
contracting States, provided such amendment or revision is in con- 
formity with the provisions of this Agreement. 

3. Certificates shall be issued by the United Nations Educational, 
Scientific and Cultural Organization for material of educational, sci- 
entific or cultural character produced by international organizations 
recognized by the United Nations or by any of the specialized 
agencies. 



173 

4. On the filing of any such certificate, there will be a decision by 
the appropriate governmental agency of the contracting State into 
which entry is sought as to whether the material is entitled to the 
privilege provided by article III, paragraph 1, of the present Agree- 
ment. This decision shall be made after consideration of the material 
and through the application of the standards provided in article I. 
If, as a result of that consideration, such agency of the contracting 
State into which entry is sought intends not to grant the privileges 
provided by article III, paragraph 1, to that material because it does 
not concede its educational, scientific and cultural character, the Gov- 
ernment of the State which certified the material, or UNESCO, as 
the case may be, shall be notified prior to any final decision in order 
that it may make friendly representations in support of the exemp- 
tion of that material to the Government of the other State into which 
entry is sought 

5. The governmental agency of the contracting State into which 
entry is sought shall be entitled to impose regulations upon the im- 
porter of the material to ensure that it shall only be exhibited or used 
for non-profit-making purposes. 

6. The decision of the appropriate governmental agency of the con- 
tracting State into which entry is sought, provided for in paragraph 
4 of this article shall be final, but in making its decision the said 
agency shall give due consideration to any representations made to it 
by the Government certifying the material or by UNESCO as the 
case may be. 

ARTICLE V 

Nothing in the present Agreement shall affect the right of the con- 
tracting States to censor material in accordance with their own laws 
or to adopt measures to prohibit or limit the importation of material 
for reasons of public security or order. 

ARTICLE VI 

Each of the contracting States shall send to the United Nations 
Educational, Scientific and Cultural Organization a copy of each 
certificate which it issues to material originating within its own terri- 
tory and shall inform the United Nations Educational, Scientific and 
Cultural Organization of the decisions taken and the reasons for any 
refusals in respect of certified materials from other contracting States 
for which entry is sought into its own territory. The United Nations 
Educational, Scientific and Cultural Organization shall communicate 
this information to all contracting States and shall maintain and 
publish in English and French catalogues of material showing all th* 
certifications and decisions made in respect of them. 

article vn 

The contracting States undertake jointly to consider means of re- 
ducing to a minimum the restrictions that are not removed by the 
present Agreement which might interfere with the international cir- 
culation of the material referred to in article I. 



174 

ARTICLE VIII 

Each contracting State shall communicate to the United Nations 
Educational, Scientific and Cultural Organization, within the period 
of six months following the coming into force of the present Agree- 
ment the measures taken in their respective territories to ensure the 
execution of the provisions of the present Agreement. The United 
Nations Educational, Scientific and Cultural Organization shall com- 
municate this information as it receives it to all contracting States. 

ARTICLE IX 

1. All disputes arising out of the interpretation or application of 
the present Agreement between States which are both parties to the 
Statute of the International Court of Justice, 2 except as to Articles 
IV and V, shall be referred to the International Court of Justice un- 
less in any specific case it is agreed by the parties to have recourse to 
another mode of settlement. 

2. If the contracting States between which a dispute has arisen are 
not parties or any one of them is not party to the Statute of the Inter- 
national Court of Justice, the dispute shall, if the States concerned 
so desire, be submitted, in accordance with the constitutional rules of 
each of them, to an arbitral tribunal established in conformity with 
the Convention for the Pacific Settlement of International Disputes 
signed at The Hague on 18 October 1907, 3 or to any other arbitral 
tribunal. 

article x 

The present Agreement is open to acceptance by the signatory 
States. The instrument of acceptance shall be deposited with the Sec- 
retary-General of the United Nations who shall notify all the Mem- 
bers of the United Nations of each deposit and the date thereof. 

ARTICLE XI 

1. On or after 1 January 1950 any Member of the United Nations 
not a signatory to the present Agreement, and any non-member State 
to which a certified copy of the present Agreement has been communi- 
cated by the Secretary- General of the United Nations, may accede 
to it. 

2. The instrument of accession shall be deposited with the Secre- 
tary-General of the United Nations, who shall notify all the Members 
of the United Nations and the non-Member States, referred to in the 
preceding paragraph, of each deposit and the date thereof. 

ARTICLE XII 

1. The present Agreement shall come into force ninety days after 
the Secretary-General of the United Nations has received at least ten 
instruments of acceptance or accession in accordance with article X 
or article XI. As soon as possible thereafter the Secretary-General 
shall draw up a pro ces -verbal specifying the date on which, in accord- 

2 TS 993 ; 59 Stat. 1055. 
-TS536; 36 Stat. 2199. 



175 

ance with this paragraph, the present Agreement shall have come into 
force. 

2. In respect of each State on behalf of which an instrument of 
acceptance or accession is subsequently deposited, the present Agree- 
ment shall come into force ninety days after the date of the deposit of 
such instrument. 

3. The present Agreement shall be registered with the Secretary- 
General of the United Nations on the day of its entry into force in 
accordance with article 102 of the Charter 4 and the regulations made 
thereunder by the General Assembly. 

ARTICLE XIII 

1. The present. Agreement may be denounced by any contracting 
State after the expiration of a period of three years from the date on 
which it comes into force in respect of that particular State. 

2. The denunciation of the Agreement by any contracting States 
shall be effected by a written notification addressed by that State to 
the Secretary-General of the United Nations who shall notify all the 
Members of the United Nations and all non-member States referred 
to in article XI of each notification and the date of the receipt 
thereof. 

3. The denunciation shall take effect one year after the receipt of 
the notification by the Secretary-General of the United Nations. 

article xrv 

1. Any contracting State may declare, at the time of signature, 
acceptance, or accession, that in accepting the present Agreement it is 
not assuming any obligation in respect of all or any territories, for 
which such contracting State has international obligations. The pres- 
ent Agreement shall, in that case, not be applicable to the territories 
named in the declaration. 

2. The contracting States in accepting the present Agreement do not 
assume responsibility in respect of any or all Non-Self-Governing terri- 
tories for which they are responsible but may notify the acceptance 
of the Agreement by any or all of such territories at the time of ac- 
ceptance by such contracting States or at any time thereafter. The 
present Agreement shall, in such cases, apply to all the territories 
named in the notification ninety days after the receipt thereof by the 
Secretary-General of the United Nations. 

3. Any contracting State may at any time after the expiration of the 
period of three years provided for in article XIII declare that it 
desires the present Agreement to cease to apply to all or any terri- 
tories for which such contracting State has international obligations or 
to any or all Non-Self -Governing territories for which it is responsible. 
The present Agreement shall, in that case, cease to apply to the terri- 
tories named in the declaration six months after the receipt thereof 
by the Secretary-General of the United Nations. 

4. The Secretary-General of the United Nations shall communicate 
to all the Members of the United Nations and to all non-member 
States referred to in article XI the declarations and notifications 



TS 993 ; 59 Stat. 1052. 



176 

received in virtue of the present article, together with the dates of 
the receipt thereof. 

ARTICLE xv 

Nothing in this Agreement shall be deemed to prohibit the con- 
tracting States from entering into agreements or arrangements with 
the United Nations or any of its specialized agencies which would 
provide for facilities, exemptions, privileges or immunities with respect 
to material emanating from or sponsored by the United Nations or 
by any of its specialized agencies. 

ARTICLE XVI 

The original of the present Agreement shall be deposited in the 
archives of the United Nations and shall be opened for signature at 
Lake Success on 15 July 1949 where it shall remain open for signature 
until 31 December 1949. Certified copies of the present Agreement 
shall be furnished by the Secretary-General of the United Nations to 
each of the Members of the United Nations and to such other Govern- 
ments as may be designated by agreement between the Economic and 
Social Council of the United Nations and the Executive Board of the 
United Nations Educational, Scientific and Cultural Organization. 

In witness whereof, the undersigned plenipotentiaries, having 
deposited their full powers found to be in due and proper form, sign 
the present Agreement in the English and French languages, each 
being equally authentic, on behalf of their respective Governments, on 
the dates appearing opposite their respective signatures. 



b. Agreement on the Importation of Educational, Scientific and 
Cultural Materials (Florence Agreement) (with reservation) * 

Agreement and protocol opened for signature at Lake Success November 22, 
1950; signed on behalf of the United States of America June 24, 1959; rati- 
fication advised by the Senate of the United States of America February 23, 
1960; ratified by the President of the United States of America October 14, 
1966; ratification of the United States of America deposited with the Secretary 
General of the United Nations November 2, 1966; proclaimed by the President 
of the United States of America November 3, 1966; entered into force with 
respect to the United States of America November 2, 1966 

Preamble 

The contracting States, 

Considering that the free exchange of ideas and knowledge and, 
in general, the widest possible dissemination of the diverse forms of 
self-expression used by civilizations are vitally important both for 
intellectual progress and international understanding, and conse- 
quently for the maintenance of world peace ; 

Considering that this interchange is accomplished primarily by 
means of books, publications and educational, scientific and cultural 
materials; 

Considering that the Constitution of the United Nations Educa- 
tional, Scientific and Cultural Organization urges co-operation be- 
tween nations in all branches of intellectual activity, including "the 
exchange of publications, objects of artistic and scientific interest and 
other materials of information" and provides further that the Organi- 
zation shall "collaborate in the work of advancing the mutual knowl- 
edge and understanding of peoples, through all means of mass 
communication and to that end recommend such international agree- 
ments as may be necessary to promote the free flow of ideas by word 
and image"; 

Recognize that these aims will be effectively furthered by an inter- 
national agreement facilitating the free flow of books, publications 
and educational, scientific and cultural materials; and 

Have, therefore, agreed to the following provisions : 

Article I 

1. The contracting States undertake not to apply customs duties 
or other charges on. or in connexion with, the importation of : 

(a) Books, publications and documents, listed in annex A to 
this Agreement ; 

(5) Educational, scientific and cultural materials, listed in 
annexes B, C, D and E to this Agreement ; 
which are the products of another contracting State, subject to the 
conditions laid down in those annexes. 



» 17 UST 1835 ; TIAS 6129. For a list of states which are parties to the Agreement, 
see Dept. of State publication, Treaties in Force. 

(177) 



178 

2. The provisions of paragraph 1 of this article shall not prevent 
any contracting State from levying on imported materials : 

(a) Internal taxes or any other internal charges of any kind, 
imposed at the time of importation or subsequently, not exceeding 
those applied directly or indirectly to like domestic products ; 

(b) Fees and charges, other than customs duties, imposed by 
governmental authorities on, or in connexion with, importation, 
limited in amount to the approximate cost of the services rendered, 
and representing neither an indirect protection to domestic prod- 
ucts nor a taxation of imports for revenue purposes. 

Article II 

1. The contracting States undertake to grant the necessary licences 
and/or foreign exchange for the importation of the following articles : 

(a) Books and publications consigned to public libraries and 
collections and to the libraries and collections of public educa- 
tional, research or cultural institutions; 

(b) Official government publications, that is, official parliamen- 
tary and administrative documents published in their country of 
origin ; 

(c) Books and publications of the United Nations or any of its 
specialized agencies ; 

(d) Books and publications received by the United Nations Ed- 
ucational, Scientific and Cultural Organization and distributed 
free of charge by it or under its supervision ; 

(e) Publications intended to promote tourist travel outside the 
country of importation, sent and distributed free of charge ; 

(/) Articles for the blind : 

(i) Books, publications and documents of all kinds in raised 
characters for the blind ; 

(ii) Other articles specially designed for the educational, 
scientific or cultural advancement of the blind, which are im- 
ported directly by institutions or organizations concerned 
with the welfare of the blind, approved by the competent 
authorities of the importing country for the purpose of duty- 
free entry of these types of articles. 

2. The contracting States which at any time apply quantitative re- 
strictions and exchange control measures undertake to grant, as far 
as possible, foreign exchange and licenses necessary for the importa- 
tion of other educational, scientific or cultural materials, and particu- 
larly the materials referred to in the annexes to this Agreement. 

Article III 

1. The contracting States undertake to give every possible facility 
to the importation of educational, scientific or cultural materials, which_ 
are imported exclusively for showing at a public exhibition approved" 
by the competent authorities of the importing country and for subse- 
quent re-exportation. These facilities shall include the granting of the 
necessary licenses and exemption from customs duties and internal 
taxes and charges of all kinds payable on importation, other than 
fees and charges corresponding to the approximate cost of services 
rendered. 



179 

2. Nothing in this article shall prevent the authorities of an im- 
porting country from taking such steps as may be necessary to ensure 
that the materials in question shall be re-exported at the close of their 
exhibition. 

Article IV 

The contracting States undertake that they will as far as possible : 

(a) Continue their common efforts to promote by every means 
the free circulation of educational, scientific or cultural materials, 
and abolish or reduce any restrictions to that free circulation 
which are not referred to in this Agreement ; 

(b) Simplify the administrative procedure governing the im- 
portation of educational, scientific or cultural materials; 

(c) Facilitate the expeditious and safe customs clearance of 
educational, scientific or cultural materials. 

Article V 

Nothing in this Agreement shall affect the right of contracting 
States to take measures, in conformity with their legislation, to pro- 
hibit or limit the importation, or the circulation after importation, of 
articles on grounds relating directly to national security, public order 
or public morals. 

Article VI 

This Agreement shall not modify or affect the laws and regulations 
of any contracting State or any of its international treaties, conven- 
tions, agreements or proclamations, with respect to copyright, trade- 
marks or patents. 

Article VII 

Subject to the provisions of any previous conventions to which the 
contracting States may have subscribed for the settlement of disputes, 
the contracting States undertake to have recourse to negotiations or 
conciliation, with a view to settlement of any disputes regarding the 
interpretation or the application of this Agreement. 

Article VIII 

In case of a dispute between contracting States relating to the edu- 
cational, scientific or cultural character of imported materials, the 
interested Parties may. by common agreement, refer it to the Director- 
General of the United Nations Educational, Scientific and Cultural 
Organization for an advisory opinion. 

Article IX 

1. This Agreement, of which the English and French texts are 
equally authentic, shall bear todav's date and remain open for signa- 
ture by all Member States of the United Nations Educational, Scien- 
tific and Cultural Organization, all Member States of the United 
Nations and any non-member State to which an invitation may have 
been addressed by the Executive Board of the United Nations Educa- 
tional, Scientific and Cultural Organization. 



180 

2. The Agreement shall be ratified on behalf of the signatory States 
in accordance with their respective constitutional procedure. 

3. The instruments of ratification shall be deposited with the Secre- 
tary-General of the United Nations. 

Article X 

The States referred to in paragraph 1 of article IX may accept this 
Agreement from 22 November 1950. Acceptance shall become effective 
on the deposit of a formal instrument with the Secretary-General of 
the United Nations. 

Article XI 

This Agreement shall come into force on the date on which the Sec- 
retary-General of the United Nations receives instruments of ratifica- 
tion or acceptance from ten States. 

Article XII 

1. The States Parties to this Agreement on the date of its coming 
into force shall each take all the necessary measures for its fully effec- 
tive operation within a period of six months after that date. 

2. For States which may deposit their instruments of ratification or 
acceptance after the date of the Agreement coming into force, these 
measures shall be taken within a period of three months from the date 
of deposit. 

3. Within one month of the expiration of the periods mentioned in 
paragraphs 1 and 2 of this article, the contracting States to this Agree- 
ment shall submit a report to the United Nations Educational, Scien- 
tific and Cultural Organization of the measures which they have taken 
for such f ully effective operation. 

4. The United Nations Educational, Scientific and Cultural Orga- 
nization shall transmit this report to all signatory States to this 
Agreement and to the International Trade Organization (provision- 
ally, to its Interim Commission) . 

Article XIII 

Any contracting State may, at the time of signature or the deposit of 
its instrument of ratification or acceptance, or at any time thereafter, 
declare by notification addressed to the Secretary-General of the 
United Nations that this Agreement shall extend to all or any of the 
territories for the conduct of whose foreign relations that contracting 
State is responsible. 

Article XIV 

1. Two years after the date of the coming into force of this Agree- 
ment, any contracting State may, on its own behalf or on behalf of any 
of the territories for the conduct of whose foreign relations that con- 
tracting State is responsible, denounce this Agreement by an instru- 
ment in writing deposited with the Secretary-General of the United 
Nations. 

2. The denunciation shall take effect one year after the receipt of the 
instrument of denunciation. 



181 

Article XV 

The Secretary-General of the United Nations shall inform the 
States referred to in paragraph 1 of Article IX, as well as the United 
Nations Educational, Scientific and Cultural Organization, and the 
International Trade Organization (provisionally, its Interim Com- 
mission), of the deposit of all the instruments of ratification and ac- 
ceptance provided for in articles IX and X, as well as of the notifica- 
tions and denunciations provided for respectively in articles XIII and 
XIV. 

Article XVI 

At the request of one-third of the contracting States to this Agree- 
ment, the Director-General of the United Nations Educational, Scien- 
tific and Cultural Organization shall place on the agenda of the next 
session of the General Conference of that Organization, the question 
of convoking a meeting for the revision of this Agreement. 

Article XVII 

Annexes A, B. C, T). and E. as well as the Protocol annexed to this 
Agreement are hereby made an integral part of this Agreement. 

Article XVIII 

1. In accordance with Article 102 of the Charter of the United 
Nations, 2 this Agreement shall be registered by the Secretary-General 
of the United Nations on the date of its coming into force. 

2. Ix faith WHEREOF the undersigned, duly authorized, have signed 
this Agreement on behalf of their respective Governments. 

Done at Lake Success. New York, this twenty-second day of Novem- 
ber one thousand nine hundred and fifty in a single copy, which shall 
remain deposited in the archives of the United Nations, and certified 
true copies of which shall be delivered to all the States referred to in 
paragraph 1 of article IX. as well as to the United Nations Educa- 
tional, Scientific and Cultural Organization and to the International 
Trade Organization (provisionally, to its Interim Commission). 

Annex A 

Books, Publications and Documents 

(i) Printed books. 

(ii) Newspapers and periodicals. 

(iii) Books and documents produced by duplicating processes other 
than printing. 

(iv) Official government publications, that is, official, parliamentary 
and administrative documents published in their country of 
origin. 

(v) Travel posters and travel literature (pamphlets, guides, time- 
tables, leaflets and similar publications), whether illustrated 
or not, including those published by private commercial en- 
terprises, whose purpose is to stimulate travel outside the 
country of importation. 



» TS 993 ; 59 Stat 1052. 



182 

(vi) Publications whose purpose is to stimulate study outside the 
country of importation. 

(vii) Manuscripts, including typescripts. 

(viii) Catalogues of books and publications, being books and publica- 
tions offered for sale by publishers or booksellers established 
outside the country of importation. 

(ix) Catalogues of films, recordings or other visual and auditory 
material of an educational, scientific or cultural character, 
being catalogues issued by or on behalf of the United Nations 
or any of its specialized agencies. 

(x) Music in manuscript or printed form, or reproduced by dupli- 
cating processes other than printing. 

(xi) Geographical, hydrographical or astronomical maps and charts. 

(xii) Architectural, industrial or engineering plans and designs, and 
reproductions thereof, intended for study in scientific estab- 
lishments or educational institutions approved by the compe- 
tent authorities of the importing country for the purpose of 
duty-free admission of these types of articles. 
(The exemptions provided by annex A shall not apply to: 

(a) Stationery; 

(b) Books, publications and documents (except catalogues, travel 
posters and travel literature referred to above) published by or for a 
private commercial enterprise, essentially for advertising purposes ; 

(c) Newspapers and periodicals in which the advertising matter is 
in excess of 70 per cent by space ; 

(d) All other items (except catalogues referred to above) in which 
the advertising matter is in excess of 25 per cent by space. Tn the case 
of travel posters and literature, this percentage shall apply only to 
private commercial advertising matter.) 

Annex B 

Works of Art and Collectors' Pieces of an Educational 
Scientific or Cultural Character 

(i) Paintings and drawings, including copies, executed entirely by 
hand, but excluding manufactured decorated wares. 

(ii) Hand-printed impressions, produced from hand-engraved or 
hand-etched blocks, plates or other material, and signed and 
numbered by the artist. 

(iii) Original works of art of statuary or sculpture, whether in the 
round, in relief, or in intaglio, excluding mass-produced re- 
productions and works of conventional craftsmanship of a 
commercial character. 

(iv) Collectors' pieces and objects or art consigned to public galleries, 
museums and other public institutions, approved by the com- 
petent authorities of the importing country for the purpose of 
duty-free entry of these types of articles, not intended for 
resale, 
(v) Collections and collectors' pieces in such scientific fields as 
anatomy, zoology, botany, mineralogy, palaeontology, archae- 
ology and ethnography, not intended for resale, 
(vi) Antiques, being articles in excess of 100 years of age. 



183 
Axxex C 

Visual axd Auditory Materials of ax Educational, Sciextific or 

Cultural Character 

(i) Films, filmstrips, microfilms, and slides of an educational, scien- 
tific or cultural character, when imported by organizations 
(including, at the discretion of the importing country, broad- 
casting organizations), approved by the competent authorities 
of the importing country for the purpose of duty-free admis- 
sion of these types of articles, exclusively for exhibition by 
these organizations or by other public or private educational, 
scientific or cultural institution? or societies approved by the 
aforesaid authorities. 

(ii) Newsreels (with or without sound track), depicting events of 
current news value at the time of importation, and imported 
in either negative form, exposed and developed, or positive 
form, printed and developed, when imported by organizations 
(including, at the discretion of the importing country, broad- 
casting organizations) approved by the competent authorities 
of the importing country for the purpose of duty-free admis- 
sion ot such films, provided that free entry may be limited to 
two copies of each subject for copying purposes. 

(iii) Sound recordings of an educational, scientific or cultural char- 
acter for use exclusively in public or private educational, scien- 
tific or cultural institutions or societies (including, at the dis- 
cretion of the importing country, broadcasting organizations) 
appioved by the competent authorities of the importing coun- 
try for the purpose of duty-free admission of these types of 
articles. 

(iv) Films, filmstrips. microfilms and sound recordings of an educa- 
tional, scientific or cultural character produced by the United 
Xations or any of its specialized agencies. 

(v) Patterns, models and wall charts for use exclusively for demon- 
strating and teaching purposes in public or private educa- 
tional, scientific or cultural institutions approved by the com- 
petent authorities of the importing country for the purpose 
of duty-free admission of these types of articles. 

Anxex D 

ScrEXTTFTC INSTRUMENTS OR APPARATUS 

Scientific instruments or apparatus, intended exclusively for edu- 
cational purposes or pure scientific research, provided : 

(a) That such scientific instruments or apparatus are consigned 
to public or private scientific or educational institutions approved 
by the competent authorities of the importing country for the 
purpose of duty-free entry of these types of articles, and used 
under the control and responsibility of these institutions; 

(b) That instruments or apparatus of equivalent scientific value 
are not being manufactured in the country of importation. 




184 

Annex E 

Articles for the Blind 

(i) Books, publications and documents of all kinds in raised char- 
acters for the blind. 

(ii) Other articles specially designed for the educational, scientific or 
cultural advancement of the blind, which are imported directly 
by institutions or organizations concerned with the welfare of 
the blind, approved by the competent authorities of the im- 
porting country for the purpose of duty-free entry of these 
types of articles. 

Protocol Annexed to the Agreement on the Importation of 
Educational, Scientific and Cultural Materials 

The contracting States, 

In the interest of facilitating the participation of the United 
States of America in the Agreement on the Importation of Educa- 
tional, Scientific and Cultural Materials, have agreed to the following : 

1. The United States of America shall have the option of rati- 
fying this Agreement, under article IX, or of accepting it, under 
article X, with the inclusion of the reservation hereunder. 

2. In the event of the United States of America becoming Party 
to this Agreement with the reservation provided for in the preced- 
ing paragraph 1, the provisions of that reservation may be in- 
voked by the Government of the United States of America with 
regard to any of the contracting States to this Agreement, or by 
any contracting State with regard to the United States of 
America, provided that any measure imposed pursuant to such 
reservation shall be applied on a non-discriminatory basis. 

(TEXT OF THE RESERVATION) 

(a) If , as a result of the obligations incurred by a contracting State 
under this Agreement, any product covered by this Agreement is 
being imported into the territory of a contracting State in such rela- 
tively increased quantities and under such conditions as to cause or 
threaten serious injury to the domestic industry in that territory pro- 
ducing like or directly competitive products, the contracting State, 
under the conditions provided for by paragraph 2 above, shall be 
free, in respect of such product and to the extent and for such time 
as may be necessary to prevent or remedy such injury, to suspend, in 
whole or in part, any obligation under this Agreement with respect to 
such product. 

(b) Before any contracting State shall take action pursuant to the 
provisions of paragraph (a) above, it shall give notice in writing to. 
the United Nations Educational, Scientific and Cultural Organization 
as far in advance as may be practicable and shall afford the Organiza- 
tion and the contracting States which are Parties to this Agreement 
an opportunity to consult with it in respect of the proposed action. 

(c) In critical circumstances where delay would cause damage 
which it would be difficult to repair, action under paragraph (a) above 
may be taken provisionally without prior consultation, on the condi- 
tion that consultation be effected immediately after taking such action. 



G. FOREIGN ECONOMIC POLICY: TARIFF AND 

TRADE LAWS 

CONTENTS 

Page 

1. Presidential Proclamation 4369 (Agreement on Trade Between the 

United States of America and the Socialist Republic of Romania) 187 

2. The General Agreement on Tariffs and Trade 189 

a. The General Agreement on Tariffs and Trade (amended) 189 

b. International Antidumping Code 254 

3. International Wheat Agreement 265 

a. Wheat Trade Convention, 1971 (amended) 266 

b. Food Aid Convention, 1971 (amended) 280 

c. Protocols for the Further Extension of the Wheat Trade Conven- 

tion and Food Aid Convention Constituting the International 

Wheat Agreement, 1971 282 



(185) 



- 78 - 13 



1. Presidential Proclamation 4369, April 24, 1975, 40 F.R. 18389 1 

Agreement on Trade Relations Between the United States of 
America and the Socialist Republic of Romania 

By the President of the United States of America 

A Proclamation 

Pursuant to the authority vested in me by the United States Consti- 
tution, I, as President of the United States of America, acting through 
duly empowered representatives, entered into negotiation with duly 
empowered representatives of the Socialist Republic of Romania look- 
ing toward the conclusion of an agreement governing trade relations 
between the United States of America and the Socialist Republic of 
Romania ; 

The aforesaid negotiations were conducted in accordance with the 
requirements of the Trade Act of 1974 (P.L. 93-618, January 3, 1975; 
88 Stat, 1978) ; 

An "Agreement on Trade Relations between the United States of 
America and the Socialist Republic of Romania." including the an- 
nexes thereto, in the English and Romanian languages, was signed on 
April 2, 1975, by duly empowered representatives of the Governments 
of the United States of America and the Socialist Republic of Ro- 
mania, respectively, and is hereto annexed; 1 

The said Agreement is in conformity with the requirements relating 
to bilateral commercial agreements as specified in section 405 (b) of the 
Trade Act of 1974 (88 Stat. 1978. 2061) : 

It is provided in Article XII of the said Agreement that it shall 
enter into force on the date of exchange of written notices of accept- 
ance by the Governments of the United States of America and the 
Socialist Republic of Romania : and 

It is provided in section 405(c) of the Trade Act of 1974 (88 Stat. 
1978, 2061) that a bilateral commercial agreement providing nondis- 
criminatory treatment to the products of countries heretofore denied 
such treatment, and a proclamation implementing such agreement, 
shall take effect only if approved by the Congress by the adoption 
of a concurrent resolution of approval, referred to in section 151 of 
the Trade Art of 1974 (88 Stat. 1978. 2001). of the extension of non- 
discriminatory treatment to the products of the country concerned: 

NOW, THEREFORE, I. GERALD R. FORD, President of the 
United States of America, acting under the authority vested in me by 
the Constitution and the statutes, including section 401(a) of the 
Trade Act of 1974. do hereby proclaim as follows: 

1 Senate Concurrent Resolution 35. passed in the Senate on July 25. 1975. and In the 
House on July 28. 1075. approved the extension of this bilateral commercial agreement. 

(187) 



188 

(1) This Proclamation shall become effective and said agreement 
shall enter into force according to its terms, and nondiscriminatory 
treatment shall be extended to the products of the Socialist Republic 
of Romania in accordance with the terms of the said Agreement, on 
the date of exchange of written notices of acceptance in accordance 
with Article XII of the said Agreement, all of the foregoing to follow 
the adoption by the House of Representatives and the Senate, in ac- 
cordance with the procedures set forth in section 151 of the said Act, 
of a concurrent resolution of approval of the extension of nondis- 
criminatory treatment to the products of the Socialist Republic of 
Romania, to the end that the same and every part of the said Agree- 
ment may be observed and fulfilled with good faith by the United 
States of America and the citizens thereof and all other persons sub- 
ject to the jurisdiction thereof as of the date of its entry into force ; and 

(2) General Headnote 3(e) of the Tariff Schedules of the United 
States is amended by deleting therefrom "Rumania" as of the effective 
date of this proclamation and a notice thereof shall be published in 
the Federal Register promptly thereafter. 

IN WITNESS WHEREOF, I have hereunto set my hand this 
twenty-fourth day of April, in the year of our Lord one thousand 
nine hundred seventy-five, and of the Independence of the United 
States of America the one hundred ninety-ninth. 



2. The General Agreement on Tariffs and Trade 
a. The General Agreement on Tariffs and Trade (amended) 

CONTENTS 

Part I : Page 

Article I — General Most-Favoured-Nation Treatment 192 

Article II — Schedules of Concessions 193 

Part II : 

Article III — National Treatment on Internal Taxation and Regulation. 195 

Article IV — Special Provisions Relating to Cinematograph Films 196 

Article V— Freedom of Transit 197 

Article VI — Anti-dumping and Countervailing Duties 198 

Article VII — Valuation for Customs Purposes 199 

Article VIII — Fees and Formalities connected with Importation and 

Exportation 201 

Article IX— Marks of Origin 202 

Article X — Publication and Administration of Trade Regulations 202 

Article XI — General Elimination of Quantitative Restrictions 203 

Article XII— Restrictions to Safeguard the Balance of Payments 204 

Article XIII — Non-discriminatory Administration of Quantitative Re- 
strictions 207 

Article XIV — Exceptions to the Rule of Non-discrimination 208 

Article XV — Exchange Arrangements 209 

Article XVI— Subsidies 211 

Section A — Subsidies in General 211 

Section B — Additional Provisions on Export Subsidies 211 

Article XVII— State Trading Enterprises 212 

Article XVIII — Governmental Assistance to Economic Development 213 

Section A 214 

Section B 214 

Section C 217 

Section D 219 

Article XIX — Emergency Action on Imports of Particular Products.. 219 

Article XX — General Exceptions 220 

Article XXI — Security Exceptions 221 

Article XXII— Consultation 221 

Article XXIII — Nullification or Impairment 222 

Part III: 

Article XXIV — Territorial Application — Frontier Traffic — Customs 

Unions and Free-trade Areas 222 

Article XXV— Joint Action by the Contracting Parties 225 

Article XXVI — Acceptance, Entry Into Force and Registration 226 

Article XXVII— Withholding or Withdrawal of Concessions 227 

Article XXVIII— Modification of Schedules 227 

Article XXVIII Bis— Tariff Negotiations 229 

Article XXIX— The Relation of This Agreement to the Havana 

Charter 229 

Article XXX— Amendments 230 

Article XXXI— Withdrawal 230 

Article XXXII— Contracting Parties 231 

Article XXXIII— Accession 231 

Article XXXIV— Annexes 231 

Article XXXV — Non-application of the Agreement Between Particular 

Contracting Parties 231 

(189) 



190 

Part IV — Trade and Development : Page 

Article XXXVI — Principles and Objectives 232 

Article XXXVII— Commitments 233 

Article XXXVIII— Joint Action 235 

Annexes A to G — Relating to Article I 236 

Anner H— Relating to Article XXVI 238 

Annex I — Notes and Supplementary Provisions 239 

Protocol of Provisional Application of the General Agreement on Tariffs 

and Trade 252 



a. The General Agreement on Tariffs and Trade 1 (amended) 2 

Concluded at Geneva, Switzerland, October 30, 1947; entered into force for the 
United States January 1, 1948 3 

The Governments of the Commonwealth of Australia, the King- 
dom of Belgium, the United States of Brazil, Burma, Canada, 
Ceylon, the Republic of Chile, the Republic of China, the Republic 
of Cuba, the Czechoslovak Republic, the French Republic, India, 
Lebanon, the Grand-Ducht of Luxemburg, the Kingdom of the 
Netherlands, New Zealand, the Kingdom of Norway, Pakistan, 
Southern Rhodesia, Syria, the Union of South Africa, the United 
Kingdom of Great Britain and Northern Ireland, and the United 
States of America : 

Recognizing that their relations in the field of trade and economic 
endeavour should be conducted with a view to raising standards of 
living, ensuring full employment and a large and steadily growing 
volume of real income and effective demand, developing the full use 
of the resources of the world and expanding the production and ex- 
change of goods. 

Being desirous of contributing to these objectives by entering into 
reciprocal and mutually advantageous arrangements directed to the 

l 6l Stat, part (5) and (6) ; TIAS 1700; 4 Bevans 639; 55-61 UNTS. The abbreviation 
"G.A.T.T." is used in the footnotes in referring to the General Agreement on Tariffs 
and Trade. The General Agreement is reproduced here as amended by various protocols, 
including those parts of the Protocol Amending the Preamble and Parts II and III and the 
Proces-Verbal of Rectification concerning that Protocol which became effective for two- 
thirds of the contracting parties, including the United States, on Oct. 7, 1957, and Feb. 
15, 1961 (Article XIV). The remaining amendments contained in the Protocol Amending 
the Preamble and Parts II and III and the amendments in the Protocol Amending Part 
I and Articles XXIX and XXX and the Protocol of Organizational Amendments, which are 
not in force for anv contracting party, have not been incorporated in this text. 

3 The nine protocols modifying the G.A.T.T. art' as follows : 

(a) Protocol modifying certain provisions of the general agreement. Dated at Habann 
March 24. l ( .)4v : entered into force for the United States April 15, 1948. 62 Stat. 1992: 
TIAS 17^ : 4 Bevans 7<>^ . r,2 DNTS 30. 

(hi Special protocol modifying art. XIV of the ppneral agreement. Dated at Habana 
March 24. 194S : entered into force for the United States April 19. 1948. 62 Stat. 2000: 
TIAS 1764 ; 4 Bevans 712 : 62 UNTS 40. 

(c) Special protocol relating to art. XXIV of the general agreement. Signed at Habana 
March 24. 1948; entered into force for the United States June 7, 1948. 62 Stat. 2013; 
TIAS 1765 ; 4 Bevans 719 ; 62 UNTS 56. 

(d) Protocol modifying Part II and art. XXVI of the general agreement. Signed at 
Geneva September 14. 1948 : entered Into force for the United States December 14, 1948. 
62 Stat. 3679 : TIAS 1890 : 4 Bevans 769 : 62 UNTS 80. 

(e) Protocol modifying art. XXVI of the general agreement. Dated at Annecv Aneust 
13. 1949: entered into force for the United States March 28. 1950. 2 UST 1583; TIAS 
2300; 62 UNTS 113. 

(f) Protocol modifying Part I and art. XXIX of the general agreement. Signed nt 
Oeneva Sentember 14. 1948: entered into force for the United States September 24. 1952. 
3 UST 5355 ; TIAS 2744 : 138 UNTS 334. 

(g) Protocol amending the preamble and parts II and III of the general agreement. 
Done at Geneva March 10, 1955 ; entered into force for the United States October 7. 1957. 
8 UST 1767 ; TIAS 3930 : 278 UNTS 168. 

(h) The G.A.T.T. was amended December 3. 1955 (19 UST 4638; TIAS 6452; 278 
UNTS 246). 

(i) Protocol to introduce Part IV. Done at Geneva February 8, 1965 : signed by the 
United States February 8. 1965; entered into force June 27. 1966. 17 UST 1977: TIAS 
6139 : 572 UNTS 320. 

3 For a list of states which are parties to the Agreement, see Dept. of State publication. 
Treaties in Force. 



(191) 



192 

substantial reduction of tariffs and other barriers to trade and to the 
elimination of discriminatory treatment in international commerce, 
Have through their Kepresentatives agreed as follows : 

Part I 

ARTICLE I GENERAL MOST-FA VOURED- NATION TREATMENT 

1. With respect to customs duties and charges of any kind imposed 
on or in connection with importation or exportation or imposed on the 
international transfer of payments for imports or exports, and with 
respect to the method of levying such duties and charges, and with 
respect to all rules and formalities in connection with importation and 
exportation, and with respect to all matters referred to in paragraphs 
2 and 4 of Article III, any advantage, favour, privilege or immu- 
nity granted by any contracting party to any product originating 
in or destined for any other country shall be accorded immediately 
and unconditionally to the like product originating in or destined 
for the territories of all other contracting parties. 

2. The provisions of paragraph 1 of this Article shall not require 
the elimination of any preferences in respect of import duties or 
charges which do not exceed the levels provided for in paragraph 4 
of this Article and which fall within the following descriptions : 

(a) preferences in force exclusively between two or more of 
the territories listed in Annex A, subject to the conditions set 
forth therein ; 

(b) preferences in force exclusively between two or more ter- 
ritories which on July 1, 1939, were connected by common sov- 
ereignty or relations of protection or suzerainty and which are 
listed in Annexes B, C and D, subject to the conditions set forth 
therein ; 

(c) preferences in force exclusively between the United States 
of America and the Republic of Cuba ; 

(d) preferences in force exclusively between neighbouring 
countries listed in Annexes E and F. 

3. 4 The provisions of paragraph 1 shall not apply to preferences 
between the countries formerly a part of the Ottoman Empire and 
detached from it on July 24, 1923, provided such preferences are ap- 
proved under paragraph 5 of Article XXV, 5 which shall be applied 
in this respect in the light of paragraph 1 of Article XXIX. 

4. The margin of preference on any product in respect of which a 
preference is permitted under paragraph 2 of this Article but is not 
specifically set forth as a maximum margin of preference in the appro- 
priate Schedule annexed to this Agreement shall not exceed : 

(a) in respect of duties or charges on any product described 
in such Schedule, the difference between the most-favoured-nation 
and preferential rates provided for therein ; if no preferential rate 
is provided for, the preferential rate shall for the purposes of- 
this paragraph be taken to be that in force on April 10, 1947, 
and, if no most-favoured-nation rate is provided for, the margin 

'Added bv Part A of Protocol Modifying Part I and Article XXIX of the G.A.T.T. 
(3U.S.T. 5356). 

5 Pending the entry into force of the Protocol Amending Part I and Articles XXIX and 
XXX, this reference to Article XXV actually reads "sub-paragraph 5(a) of Article XXV," 
although paragraph 5 is no longer divided into sub-paragraphs (a), (b), etc., as was for- 
merly the case. The preseur text of paragraph 5 was formerly sub-paragraph 5(a) of 
Article XXV. 



193 

shall not exceed the difference between the most-favoured-nation 
and preferential rates existing on April 10, 1947 ; 

(b) in respect of duties or charges on any product not described 
in the appropriate Schedule, the difference between the most- 
favoured-nation and preferential rates existing on April 10, 1947. 
In the case of the contracting parties named in Annex G, the date 
of April 10, 1947, referred to in sub-paragraphs (a) and (b) of this 
paragraph shall be replaced by the respective dates set forth in that 
Annex. 

ARTICLE II — SCHEDULES OF CONCESSIONS 

1. (a) Each contracting party shall accord to the commerce of the 
other contracting parties treatment no loss favourable than that pro- 
vided for in the appropriate Part of the appropriate Schedule annexed 
to this Agreement. 

(b) The products described in Part I of the Schedule relating to 
any contracting party, which are the products of territories of other 
contracting parties, shall, on their importation into the territory to 
which the Schedule relates, and subject to the terms, conditions or 
qualifications set forth in that Schedule, be exempt from ordinary 
customs duties in excess of those set forth and provided for therein. 
Such products shall also be exempt from all other duties or charges 
of any kind imposed on or in connection with importation in excess 
of those imposed on the date of this Agreement or those directly and 
mandatorily required to be imposed thereafter by legislation in force 
in the importing territory on that date. 

(c) The products described in Part II of the Schedule relating to any 
contracting party which are the products of territories entitled under 
Article I to receive preferential treatment upon importation intothe 
territory to which the Schedule relates shall, on their importation into 
such territory, and subject to the terms, conditions or qualifications 
set forth in that Schedule, be exempt from ordinarv customs duties in 
excess of those set forth and provided for in Part II of that Schedule. 
Such products shall also be exempt from all other dutiesor charges 
of any kind imposed on or in connection with importation in excess of 
those imposed on the date of this Agreement or those directly and man- 
datorily required to be imposed thereafter by legislation in force in 
the importing territory on that date. Nothing in this Article shall pre- 
vent any contracting party from maintaining its requirements exist- 
ing on the date of this Agreement as to the eligibility of goods for 
entry at preferential rates of duty. 

2. Nothing in this Article shall prevent any contracting party from 
imposing at any time on the importation of any product: 

(a) a charge equivalent to an internal tax imposed consistently 
with the provisions of paragraph 2 of Article III in respect of 
the like domestic product or in respect of an article from which the 
imported product has been manufactured or produced in whole 
or in part; 

(b) any anti-dumping or countervailing duty applied consist- 
ently with the provisions of Article VI; 

(c) fees or other charges commensurate with the cost of serv- 
ices rendered. 



194 

3. No contracting party shall alter its method of determining dutiable 
value or of converting currencies so as to impair the value of any of 
the concessions provided for in the appropriate Schedule annexed to 
this Agreement. 

4. If any contracting party establishes, maintains or authorizes, 
formally or in effect, a monopoly of the importation of any product 
described in the appropriate Schedule annexed to this Agreement, 
such monopoly shall not, except as provided for in that Schedule 
or as otherwise agreed between the parties which initially negotiated 
the concession, operate so as to afford protection on the average in ex- 
cess of the amount of protection provided for in that Schedule. The 
provisions of this paragraph shall not limit the use by contracting 
parties of any form of assistance to domestic producers permitted by 
other provisions of this Agreement. 

5. If any contracting party considers that a product is not receiving 
from another contracting party the treatment which the first contract- 
ing party believes to have been contemplated by a concession provided 
for in the appropriate Schedule annexed to this Agreement, it shall 
bring the matter directly to the attention of the other contracting 
party. If the latter agrees that the treatment contemplated was that 
claimed by the first contracting party, but declares that such treatment 
cannot be accorded because a court or other proper authority has ruled 
to the effect that the product involved cannot be classified under the 
tariff laws of such contracting party so as to permit the treatment con- 
templated in this Agreement, the two contracting parties, together 
with any other contracting parties substantially interested, shall enter 
promptly into further negotiations with a view to a compensatory 
adjustment of the matter. 

6. (a) The specific duties and charges included in the Schedules re- 
lating to contracting parties members of the International Monetary 
Fund, and margins of preference in specific duties and charges main- 
tained by such contracting parties, are expressed in the appropriate 
currency at the par value accepted or provisionally recognized by the 
Fund at the date of this Agreement. Accordingly, in case this par 
value is reduced consistently with the Articles of Agreement of the 
International Monetary Fund by more than twenty per centum, such 
specific duties and charges and margins of preference may be adjusted 
to take account of such reduction; Provided, That the contracting 
parties (i.e., the contracting parties acting jointly as provided 
tor in Article XXV) concur that such adjustments will not im- 
pair the value of the concessions provided for in the appropriate 
Schedule or elsewhere in this Agreement, due account being taken of 
all factors which may influence the need for, or urgency of, such 
adjustments. 

(b) Similar provisions shall apply to any contracting party not a 
member of the Fund, as from the date on which such contracting party 
becomes a member of the Fund or enters into a special exchange agree- 
ment in pursuance of Article XV. 

7. The Schedules annexed to this Agreement are hereby made an 
integral part of Part I of this Agreement. 



195 
Part II 

ARTICLE III XATIOXAL TREATMEXT OX IXTERXAL TAXATTOX AXD 

REGULATIOX 6 

1. The contracting parties recognize that internal taxes and other 
internal charges, and laws, regulations and requirements affecting the 
internal sale, offering for sale, purchase, transportation, distribution 
or use of products, and internal quantitative regulations requiring 
the mixture, processing or use of products in specified amounts or pro- 
portions, should not be applied to imported or domestic products so as 
to afford protection to domestic production. 

2. The products of the territory of any contracting party imported 
into the territory of any other contracting party shall not be subject, 
directly or indirectly, to internal taxes or other internal charges of any 
kind in excess of those applied, directly or indirectly, to like domestic 
products. Moreover, no contracting party shall otherwise apply in- 
ternal taxes or other internal charges to imported or domestic prod- 
ucts in a manner contrary to the principles set forth in paragraph 1. 

3. With respect to any existing tax which is inconsistent with the 
provisions of paragraph 2, but which is specifically authorized under 
a trade agreement, in force on April 10, 1947, in which the import duty 
on the (axed product is bound against increase, the contracting party 
imposing the tax shall be free to postpone the application of the pro- 
visions of paragraph 2 to such tax until such time as it can obtain re- 
lease from the obligations of such trade agreement in order to permit 
the increase of such duty to the extent necessary to compensate for the 
elimination of the protective element of the tax. 

4. The products of the territory of any contracting party imported 
into the territory of any other contracting party shall be accorded 
treatment no less favourable than that accorded to like products of 
national origin in respect of all laws, regulations and requirements 
affecting their internal sale, offering for sale, purchase, transportation, 
distribution or use. The provisions of this paragraph shall not prevent 
the application of differential internal transportation charges which 
are based exclusively on the economic operation of the means of trans- 
port and not on the nationality of the product. 

5. No contracting party shall establish or maintain any internal 
quantitative regulation relating to the mixture, processing or use of 
products in specified amounts or proportions which requires, directly 
or indirectly, that any specified amount or proportion of any product 
which is the subject of the regulation must be supplied from domestic 
sources. Moreover, no contracting party shall otherwise apply internal 
quantitative regulations in a manner contrary to the principles set 
forth in paragraph 1. 

6. The provisions of paragraph 5 shall not apply to any internal 
quantitative regulation in force in the territory of any contracting 
party on July 1, 1939, April 10, 1947, or March 24, 1948, at the option 

8 As amended and restated by the Protocol Modifying Part II and Article XXVI of 
G.A.T.T. (62 Stat. 3679). 



196 

of that contracting party ; Provided, That any such regulation which 
is contrary to the provisions of paragraph 5 shall not be modified to 
the detriment of imports and shall be treated as a customs duty for 
the purpose of negotiation. 

7. No internal quantitative regulation relating to the mixture, proc- 
essing or use of products in specified amounts or proportions shall be 
applied in such a manner as to allocate any such amount or proportion 
among external sources of supply. 

8. (a) The provisions of this Article shall not apply to laws, regu- 
lations or requirements governing the procurement by governmental 
agencies of products purchased for governmental purposes and not 
with a view to commercial resale or with a view to use in the produc- 
tion of goods for commercial sale. 

(b) The provisions of this Article shall not prevent the payment 
of subsidies exclusively to domestic producers, including payments to 
domestic producers derived from the proceeds of internal taxes or 
charges applied consistently with the provisions of this Article and 
subsidies effected through governmental purchases of domestic 
products. 

9. The contracting parties recognize that internal maximum price 
control measures, even though conforming to the other provisions of 
this Article, can have effects prejudicial to the interests of contracting 
parties supplying imported products. Accordingly, contracting parties 
applying such measures shall take account of the interests of export- 
ing contracting parties with a view to avoiding to the fullest practica- 
ble extent such prejudicial effects. 

10. The provisions of this Article shall not prevent any contracting 
party from establishing or maintaining internal quantitative regula- 
tions relating to exposed cinematograph films and meeting the require- 
ments of Article IV. 

ARTICLE IV — SPECIAL PROVISIONS RELATING TO CINEMATOGRAPH FILMS 

If any contracting party establishes or maintains internal quantita- 
tive regulations relating to exposed cinematograph films, such regula- 
tions shall take the form of screen quotas which shall conform to the 
following requirements: 

(a) Screen quotas may require the exhibition of cinematograph 
films of national origin during a specified minimum proportion of 
the total screen time actually utilized, over a specified period of 
not less than one year, in the commercial exhibition of all films 
of whatever origin, and shall be computed on the basis of screen 
time per theatre per year or the equivalent thereof ; 

(b) With the exception of screen time reserved for films of 
national origin under a screen quota, screen time including that 
released by administrative action from screen time reserved for 
films of national origin, shall not be allocated formally or in effect 
among sources of supply ; 

(c) Notwithstanding the provisions of sub-paragraph (b) of 
this Article, any contracting party may maintain screen quotas 
conforming to the requirements of sub-paragraph (a) of this Ar- 
ticle which reserve a minimum proportion of screen time for films 



197 

of a specified origin other than that of the contracting party im- 
posing sucli screen quotas; Provided, That no such minimum pro- 
portion of screen time shall be increased above the level in effect 
on April 10, 1947; 

(d) Screen quotas shall be subject to negotiation for their lim- 
itation, liberalization or elimination. 

ARTICLE V — FREEDOM OF TRANSIT 

1. Goods (including baggage), and also vessels and other means of 
transport, shall be deemed to be in transit across the territory of a con- 
tracting party when the passage across such territory, with or without 
trans-shipment, warehousing, breaking bulk, or change in the mode of 
transport, is only a portion of a complete journey beginning and ter- 
minating beyond the frontier of the contracting party across whose 
territory the traffic passes. Traffic of this nature is termed in this Ar- 
ticle "traffic in transit''. 

2. There shall be freedom of transit through the territory of each 
contracting party, via the routes most convenient for international 
transit, for traffic in transit to or from the territory of other contract- 
ing parties. No distinction shall be made which is based on the flag 
of vessels, the place of origin, departure, entry, exit or destination, or 
on any circumstances relating to the ownership of goods, of vessels or 
of other means of transport. 

3. Any contracting party may require that traffic in transit through 
its territory be entered at the proper custom house, but, except in cases 
of failure to comply with applicable customs laws and regulations, 
such traffic coming from or going to the territory of other contracting 
parties shall not be subject to any unnecessary delays or restrictions 
and shall be exempt from customs duties and from all transit duties 
or other charges imposed in respect of transit, except charges for 
transportation or those commensurate with administrative expenses 
entailed by transit or with the cost of services rendered. 

4. All charges and regulations imposed by contracting parties on 
traffic in transit to or from the territories of other contracting parties 
shall be reasonable, having regard to the conditions of the traffic. 

5. With respect to all charges, regulations and formalities in con- 
nection with transit, each contracting party shall accord to traffic in 
transit to or from the territory of any other contracting party treat- 
ment no less favourable than the treatment accorded to traffic in transit 
to or from any third country. 

6. Each contracting party shall accord to products which have been 
in transit through the territory of any other contracting party treat- 
ment no less favourable than that which would have been accorded to 
such products had they been transported from their place of origin to 
their destination without going through the territory of such other 
contracting party. Any contracting party shall, however, be free to 
maintain its requirements of direct consignment existing on the date of 
this Agreement, in respect of any goods in regard to which such di- 
rect consignment is a requisite condition of eligibility for entry of the 
goods at preferential rates of duty or has relation to the contracting 
party's prescribed method of valuation for duty purposes. 



198 

7. The provisions of this Article shall not apply to the operation of 
aircraft in transit, but shall apply to air transit of goods (including 
baggage). 

ARTICLE VI— ANTI-DUMPING AND COUNTERVAILING DUTIES T 

1. The contracting parties recognize that dumping, by which prod- 
ucts of one country are introduced into the commerce of another coun- 
try at less than the normal value of the products, is to be condemned 
if it causes or threatens material injury to an established industry in 
the territory of a contracting party or materially retards the estab- 
lishment of a domestic industry. For the purposes of this Article, a 
product is to be considered as being introduced into the commerce of 
an importing country at less than its normal value, if the price of the 
product exported from one country to another 

(a) is less than the comparable price, in the ordinary course of 
trade, for the like product when destined for consumption in the 
exporting country, or, 

(b) in the absence of such domestic price, is less than either 

(i) the highest Comparable price for the like product for 
export to any third country in the ordinary course of trade, 
or 

(ii) the cost of production of the product in the country 
of origin plus a reasonable addition for selling cost and 
profit. 
Due allowance shall be made in each case for differences in condi- 
tions and terms o.f sale, for differences in taxation, and for other dif- 
ferences affecting price comparability. 

2. In order to offset or prevent dumping, a contracting party may 
levy on any dumped product an anti-dumping duty not greater in 
amount than the margin of dumping in respect of such product. For 
the purposes of this Article, the margin of dumping is the price differ- 
ence determined in accordance with the provisions of paragraph 1. 

3. No countervailing duty shall be levied on any product of the 
territory of any contracting party imported into the territory of an- 
other contracting party in excess of an amount equal to the estimated 
bounty or subsidy determined to have been granted, directly or indi- 
rectly, on the manufacture, production or export of such product in 
the country of origin or exportation, including any special subsidy to 
the transportation of a particular product. The term "countervailing 
duty" shall be understood to mean a special duty levied for the purpose 
of offsetting any bounty or subsidy bestowed, directly or indirectly, 
upon the manufacture, production or export of any merchandise. 

4. No product of the territory or any contracting: party imported 
into the territory of any other contracting party shall be subject to 
anti -dumping or countervailing duty by reason of the exemption of 
such product from duties or taxes borne by the like product when 
destined for consumption in the country of origin or exportation, or 
by reason of the refund of such duties or taxes. 

' 'As amended and restated by Protocol Modifying Part II and Article XXVI of the 
G.A.T.T. (62 Stat. 3679). 



199 

5. No product of the territory of any contracting party imported 
into the territory of any other contracting party shall be subject to 
both anti-dumping and countervailing duties to compensate for the 

6. 8 (a) No contracting party shall levy any anti-dumping or counter- 
vailing duty on the importation of any product of the territory of an- 
other contracting party unless it determines that the effect of the dump- 
ing or subsidization, as the case may be, is such as to cause or threaten 
materia] injury to an established domestic industry, or is such as to 
retard materially the establishment of a domestic industry. 

(b) The contracting parties may waive the requirement of 
sub-paragraph (a) of this paragraph so as to permit a contracting 
party to levy an anti-dumping or countervailing duty on the importa- 
tion of any product for the purpose of offsetting dumping or subsidiza- 
tion which causes or threatens material injury to an industry in the 
territory of another contracting party exporting the product con- 
cerned to the territory of the importing contracting party. The 
contracting parties shall waive the requirements of sub-para- 
graph (a) of this paragraph, so as to permit the levying of a counter- 
vailing duty, in cases in which they find that a subsidy is causing or 
threatening material injury to an industry in the territory of another 
contracting party exporting the product concerned to the territory of 
the importing contracting party. 

(c) In exceptional circumstances, however, where delay might 
cause damage which would be difficult to repair, a contracting party 
may levy a countervailing duty for the purpose referred to in sub- 
paragraph (b) of this paragraph without the prior approval of the 
contracting parties; Provided, That such action shall be reported im- 
mediately to the contracting parties and that the countervailing duty 
shall be withdrawn promptly if the contracting parties disapprove. 

7. A system for the stabilization of the domestic price or of the re- 
turn to domestic producers of a primary commodity, independently of 
the movements of export prices, which results at times in the sale of 
the commodity for export at a price lower than the comparable price 
charged for the like commodity to buyers in the domestic market, shall 
be presumed not to result in material injury within the meaning of 
paragraph 0> if it is determined by consultation among the contracting 
parties substantially interested in the commodity concerned that: 

(a) the system has also resulted in the sale of the commodity for 
export at a price higher than the comparable price charged for 
the like commodity to buyers in the domestic market, and 

(b) the system is so operated, either because of the effective 
regulation of production, or otherwise, as not to stimulate exports 
unduly or otherwise seriously prejudice the interests of other con- 
tracting parties. 

ARTICLE VII — VALUATION FOR CUSTOMS PURPOSES 9 

1. The contracting parties recognize the validity of the general 
principles of valuation set forth in the following paragraphs of this 
Article, and they undertake to give effect to such principles, in respect 

8 As amended and restated by Part D of the Protocol Amending the Preamble and Parts 
II and III of the G.A.T.T. fR UST 1769). 

•Paragraphs 1 and 2 as amended and restated bv Part I of the Protocol Amending the 
Preamble and Parts I and II of the G.A.T.T. (8 UST 1770). 



200 

of all products subject to duties or other charges or restrictions on 
importation and exportation based upon or regulated in any manner 
by value. Moreover, they shall, upon a request by another contracting 
party review the operation of any of their laws or regulations relating 
to value for customs purposes in the light of these principles. The 
contracting parties may request from contracting parties reports on 
steps taken by them in pursuance of the provisions of this Article. 

2. (a) The value for customs purposes of imported merchandise 
should be based on the actual value of the imported merchandise on 
which duty is assessed, or of like merchandise, and should not be based 
on the value of merchandise of national origin or on arbitrary or 
fictitious values. m 

(b) "Actual value" should be the price at which, at a time and 
place determined by the legislation of the country of importation, such 
or like merchandise is sold or offered for sale in the ordinary course 
of trade under fully competitive conditions. To the extent to which 
the price of such or like merchandise is governed by the quantity in a 
particular transaction, the price to be considered should uniformly be 
related to either (i) comparable quantities, or (ii) quantities not less 
favourable to importers than those in which the greater volume of the 
merchandise is sold in the trade between the countries of exportation 
and importation. 

(c) When the actual value is not ascertainable in accordance with 
sub-paragraph (b) of this paragraph, the value for customs purposes 
should be based on the nearest ascertainable equivalent of such value. 

3. The value for customs purposes of any imported product should 
not include the amount of any internal tax, applicable within the 
country of origin or export, from which the imported product has 
been exempted or has been or will be relieved by means of refund. 

4. (a) Except as otherwise provided for in this paragraph, where 
it is necessary for the purposes of paragraph 2 of this Article for a 
contracting party to convert into its own currency a price expressed 
in the currency of another country, the conversion rate of exchange 
to be used shall be based, for each currency involved, on the par value 
as established pursuant to the Articles of Agreement of the Interna- 
tional Monetary Fund or on the rate of exchange recognized by the 
Fund, or on the par value established in accordance with a special 
exchange agreement entered into pursuant to Article XV of this 
Agreement. 

(b) Where no such established par value and no such recognized 
rate of exchange exist, the conversion rate shall reflect effectively the 
current value of such currency in commercial transactions. 

(c) The contracting parties, in agreement with the International 
Monetary Fund, shall formulate rules governing the conversion by 
contracting parties of any foreign currency in respect of which multi- 
ple rates of exchange are maintained consistently with the Articles of 
Agreement of the International Monetary Fund. Any contracting 
party may apply such rules in respect of such foreign currencies for 
the purposes of paragraph 2 of this Article as an alternative to the use 
of par values. Until such rules are adopted by the contracting parties, 
any contracting party may employ, in respect of any such foreign cur- 
rency, rules of conversion for the purposes of paragraph 2 of this 



201 

Article which are designed to reflect effectively the value of such for- 
eign currency in commercial transactions. 

(d) Nothing in this paragraph shall be construed to require any 
contracting party to alter the method of converting currencies for 
customs purposes which is applicable in its territory on the date of 
this Agreement, if such alteration would have the effect of increasing 
generally the amounts of duty payable. 

5. The bases and methods for determining the value of products sub- 
ject to duties or other charges or restrictions based upon or regulated 
in any manner by value should be stable and should be given sufficient 
publicity to enable traders to estimate, with a reasonable degree of 
certainty, the value for customs purposes. 

ARTICLE VIII — FEES AND FORMALITIES CONNECTED WITH IMPORTATION AND 

EXPORTATION 10 

1. (a) All fees and charges of whatever character (other than im- 
port and export duties and other than taxes within the purview of Ar- 
ticle III) imposed by contracting parties on or in connexion with im- 
portation or exportation shall be limited in amount to the approximate 
cost of services rendered and shall not represent an indirect protection 
to domestic products or a taxation of imports or exports for fiscal 
purposes. 

(b) The contracting parties recognize the need for reducing the 
number and diversity of fees and charges referred to in sub-paragraph 

(c) The contracting parties also recognize the need for minimizing 
the incidence and complexity of import and export formalities and for 
decreasing and simplifying import and export documentation require- 
ments. 

2. A contracting party shall, upon request by another contracting 
party or by the contracting parties, review the operation of its laws 
and regulations in the light of the provisions of this Article. 

3. No contracting party shall impose substantial penalties for minor 
breaches of customs regulations or procedural requirements. In par- 
ticular, no penalty in respect of any omission or mistake in customs 
documentation which is easily rectiriable and obviously made without 
fraudulent intent or gross negligence shall be greater than necessary 
to serve merely as a warning. 

4 The provisions of this Article shall extend to fees, charges, for- 
malities and requirements imposed by governmental authorities in con- 
nection with importation and exportation, including those relating to : 

(a) consular transactions, sucli as consular invoices and certifi- 
cates; 

(b) quantitative restrictions; 

(c) licensing; 

(d) exchange control; 

(e) statistical services; 

(f) documents, documentation and certification; 

(g) analysis and inspection; and 

(h) quarantine, sanitation and fumigation. 

and P^tf ilVd if? St ^T^Ji^X ^^ Amend,n * the P ^^ 



20-039 O - 78 - 14 



202 

ARTICLE IX — MARKS OF ORIGIN 

1. Each contracting party shall accord to the products of the terri- 
tories of other contracting parties treatment with regard to marking 
requirements no less favourable than the treatment accorded to like 
products of any third country. 

2. 11 The contracting parties recognize that, in adopting and enforc- 
ing laws and regulations relating to marks of origin, the difficulties 
and inconveniences which such measures may cause to the commerce 
and industry of exporting countries should be reduced to a minimum, 
due regard being had to the necessity of protecting consumers against 
fraudulent or misleading indications. 

3. Whenever it is administratively practicable to do so, contracting 
parties should permit required marks of origin to be affixed at the time 
of importation. 

4. The laws and regulations of contracting parties relating to the 
marking of imported products shall be such as to permit compliance 
without seriously damaging the products, or materially reducing their 
value, or unreasonably increasing their cost. 

5. As a general rule, no special duty or penalty should be imposed 
by any contracting party for failure to comply with marking require- 
ments prior to importation unless corrective marking is unreasonably 
delayed or deceptive marks have been affixed or the required marking 
has been intentionally omitted. 

6. The contracting parties shall co-operate with each other with a 
view to preventing the use of trade names in such manner as to misrep- 
resent the true origin of a product, to the detriment of such distinc- 
tive regional or geographical names of products of the territory of a 
contracting party as are protected by its legislation. Each contracting 
party shall accord full and sympathetic consideration to such requests 
or representations as may be made by any other contracting party 
regarding the application of the undertaking set forth in the preced- 
ing sentence to names of products which have been communicated to 
it by the other contracting party. 

ARTICLE X — PUBLICATION AND ADMINISTRATION OF TRADE REGULATIONS 

1. Laws, regulations, judicial decisions and administrative rulings 
of general application, made effective by any contracting party, per- 
taining to the classification or the valuation of products for customs 
purposes, or to rates of duty, taxes or other charges, or to requirements, 
restrictions or prohibitions on imports or exports or on the transfer 
of payments therefor, or affecting their sale, distribution, transporta- 
tion, insurance, warehousing, inspection, exhibition processing, mix- 
ing or other use, shall be published promptly in such a manner as to 
enable governments and traders to become acquainted with them. 
Agreements affecting international trade policy which are in force 
between the government or a governmental agency of any contracting 
party and the government or governmental agency of any other con- 
tracting party shall also be published. The provisions of this para- 
graph shall not require any contracting party to disclose confidential 

11 Paragraph 2 insert o.l by Part G of the Protocol Amending the Preamble and Parts II 
and III of the G.A.T.T. (8 UST 1771). 



203 

information which would impede law enforcement or otherwise be con- 
trary to the public interest or would prejudice the legitimate commer- 
cial interests of particular enterprises, public or private. 

2. No measure of general application taken by any contracting party 
effecting an advance in a rate of duty or other charge on imports under 
an established and uniform practice, or imposing a new or more bur- 
densome requirement, restriction or prohibition on imports, or on the 
transfer of payments therefor, shall be enforced before such measure 
has been officially published. 

3. (a) Each contracting party shall administer in a uniform, im- 
partial and reasonable manner all its laws, regulations, decisions and 
rulings of the kind described in paragraph 1 of this Article. 

(b) Each contracting party shall maintain, or institute as soon as 
practicable, judicial, arbitral or administrative tribunals or procedures 
for the purpose, inter alia, of the prompt review and correction of ad- 
ministrative action relating to customs matters. Such tribunals or 
procedures shall be independent of the agencies entrusted with admin- 
istrative enforcement and their decisions shall be implemented by, and 
shall govern the practice of, such agencies unless an appeal is lodged 
with a court or tribunal of superior jurisdiction within the time pre- 
scribed for appeals to be lodged by importers ; Provided, That the cen- 
tral administration of such agency may take steps to obtain a review 
of the matter in another proceeding if there is good cause to believe 
that the decision is inconsistent with established principles of law or 
the actual facts. 

(c) The provisions of sub-paragraph (b) of this paragraph, shall 
not require the elimination or substitution of procedures in force in the 
territory of a contracting party on the date of this Agreement which 
in fact provide for an objective and impartial review of administra- 
tive action even though such procedures are not fully or formally in- 
dependent of the agencies entrusted with administrative enforcement. 
Any contracting party employing such procedures shall, upon request, 
furnish the contracting parties with full information thereon in order 
that they may determine whether such procedures conform to the re- 
quirements of this sub-paragraph. 

AimCLE XI — GENERAL ELIMINATION OF QUANTITATIVE RESTRICTIONS 

1. No prohibitions or restrictions other than duties, taxes or other 
charges, whether made effective through quotas, import or export 
licenses or other measures, shall be instituted or maintained by any 
contracting party on the importation of any product of the territory 
of any other contracting party or on the exportation or sale for export 
of any product destined for the territory of any other contracting 
party. 

2. The provisions of paragraph 1 of this Article shall not extend to 
the following : 

(a) Export prohibitions or restrictions temporarily applied to 
prevent or relieve critical shortages of foodstuffs or other products 
essential to the exporting contracting party ; 

(b) Import and export prohibitions or restrictions necessary to 
the application of standards or regulations for the classification, 
grading or marketing of commodities in international trade : 



204 

(c) Import restrictions on any agricultural or fisheries product, 
imported in any form, necessary to the enforcement of govern- 
mental measures which operate : 

(i) to restrict the quantities of the like domestic product 
permitted to be marketed or produced, or, if there is no sub- 
stantial domestic production of the like product, of a domestic 
product for which the imported product can be directly sub- 
stituted; or 

(ii) to remove a temporary surplus of the like domestic 
product, or, if there is no substantial domestic production of 
the like product, of a domestic product for which the im- 
ported product can be directly substituted, by making the 
surplus available to certain groups of domestic consumers 
free of charge or at prices below the current market level ; or 
(iii) to restrict the quantities permitted to be produced of 
any animal product the production of which is directly de- 
pendent, wholly or mainly, on the imported commodity, 
if the domestic production of that commodity is relatively 
negligible. 
Any contracting party applying restrictions on the importation of 
any product pursuant to sub-paragraph (c) of this paragraph shall 
give public notice of the total quantity or value of the product per- 
mitted to be imported during a specified future period and of any 
change in such quantity or value. Moreover, any restrictions applied 
under (i) above shall not be such as will reduce the total of imports 
relative to the total of domestic production, as compared with the 
proportion which might reasonably be expected to rule between the 
two in the absence of restrictions. In determining this proportion, the 
contracting party shall pay due regard to the proportion prevailing 
during a previous representative period and to any special factors 
which may have affected or may be affecting the trade in the product 
concerned. 

ARTICLE XII RESTRICTIONS TO SAFEGUARD THE BALANCE OF PAYMENTS 12 

1. Notwithstanding the provisions of paragraph 1 of Article XI, 
any contracting party, in order to safeguard its external financial posi- 
tion and its balance of payments, may restrict the quantity or value of 
merchandise permitted to be imported, subject to the provisions of the 
following paragraphs of this Article. 

2. (a) Import restrictions instituted, maintained or intensified by a 
contracting party under this Article shall not exceed those necessary : 

(i) to forestall the imminent threat of, or to stop, a serious de- 
cline in its monetary reserves, or 

(ii) in the case of a contracting party with very low monetary 
reserves, to achieve a reasonable rate of increase in its reserves. 
Due regard shall be paid in either case to any special factors which 
may be affecting the reserves of such contracting party or its need for 
reserves, including, where special external credits or other resources 
are available to it, the need to provide for the appropriate use of such 
credits or resources. 



12 As amended and restated by Part I of the Protocol Amending the Preamble and Parts 
ri and III of the O.A.T.T. (8 UST 1771). 



205 

(b) Contracting parties applying restrictions under sub-paragraph 
(a) of this paragraph shall progressively relax them as such condi- 
tions improve, maintaining them only to the extent that the conditions 
specified in that sub-paragraph still justify their application. They 
shall eliminate the restrictions when conditions would no longer justify 
their institution or maintenance under that sub -paragraph. 

3. (a) Contracting parties undertake, in carrying out their domestic 
policies, to pay due regard to the need for maintaining or restoring 
equilibrium in their balance of payments on a sound and lasting basis 
and to the desirability of avoiding an uneconomic employment of pro- 
ductive resources. They recognize that in order to achieve these ends, it 
is desirable so far as possible to adopt measures which expand rather 
than contract international trade. 

(b) Contracting parties applying restrictions under this Article 
may determine the incidence of the restrictions on imports of differ- 
ent products or classes of products in such a way as to give priority to 
the importation of those products which are more essential. 

(c) Contracting parties applying restrictions under this Article 
undertake : 

(i) to avoid unnecessary damage to the commercial or economic 
interests of any other contracting party ; 

(ii) not to apply restrictions so as to prevent unreasonably the 
importation of any description of goods in minimum commercial 
quantities the exclusion of which would impair regular channels 
of trade ; and 

(iii) not to apply restrictions which would prevent the im- 
portation of commercial samples or prevent compliance with 
patent, trade mark, copyright, or similar procedures. 

(d) The contracting parties recognize that, as a result of domestic 
policies directed towards the achievement and maintenance of full 
and productive employment or towards the development of economic 
resources, a contracting party may experience a high level of demand 
for imports involving a threat to its monetary reserves of the sort re- 
ferred to in paragraph 2(a) of this Article. Accordingly, a contract- 
ing party otherwise complying with the provisions of this Article 
shall not be required to withdraw or modify restrictions on the 
ground that a change in those policies would render unnecessary re- 
strictions which it is applying under this Article. 

4. (a) Any contracting party applying new restrictions or raising 
the general level of its existing restrictions by a substantial intensifica- 
tion of the measures applied under this Article shall immediately 
after instituting or intensifying such restrictions (or, in circumstances 
in which prior consultation is practicable, before doing so) consult 
with the contracting parties as to the nature of its balance of payments 
difficulties, alternative corrective measures which may be available, 
and the possible effect of the restrictions on the economies of other 
contracting parties. 

(b) On a date to be determined by them, the contracting parties 
shall review all restrictions still applied under this Article on that 
date. Beginning one year after that date, contracting parties applying 
import restrictions under this Article shall enter into consultations 
of the type provided for in sub-paragraph (a) of this paragraph with 
the contracting parties annually. 



206 

(c) (i) If, in the course of consultations with a contracting party 
under sub-paragraph (a) or (b) above, the contracting parties 
find that the restrictions arc not consistent with the provisions 
of this Article or with those of Article XIII (subject to the provisions 
of Article XIV) , they shall indicate the nature of the inconsistency and 
may advise that the restrictions be suitably modified. 

(ii) If, however, as a result of the consultations, the contract- 
ing parties determine that the restrictions are being applied in a 
manner involving an inconsistency of a serious nature with the pro- 
visions of this Article or with those of Article XIII (subject to the 
provisions of Article XIV) and that damage to the trade of any con- 
tracting party is caused or threatened thereby, they shall so inform the 
contracting party applying the restrictions and shall make appropri- 
ate recommendations for securing conformity with such provisions 
within a specified period of time. If such contracting party does not 
comply with these recommendations within the specified period, the 
contracting parties may release any contracting party the trade of 
which is adversely affected by the restrictions from such obligations 
under this Agreement towards the contracting party applying tho 
restrictions as they determine to be appropriate in the circumstances. 

(d) The contracting parties shall invite any contracting party 
which is applying restrictions under this Article to enter into 
consultations with them at the request of any contracting party which 
can establish a prima facie case that the restrictions are inconsistent 
with the provisions of this Article or with those of Article XIII (sub- 
ject to the provisions of Article XIV) and that its trade is adversely 
affected thereby. However, no such invitation shall be issued unless the 
contracting parties have ascertained that direct discussions be- 
tween the contracting parties concerned have not been successful. 
If, as a result of the consultations with the contracting parties, no 
agreement is reached and they determine that the restrictions are 
being applied inconsistently with such provisions, and that damage 
to the trade of the contracting party initiating the procedure is 
caused or threatened thereby, they shall recommend the withdrawal or 
modification of the restrictions. If the restrictions are not withdrawn 
or modified within such time as the contracting parties may pre- 
scribe, they may release the contracting party initiating the pro- 
cedure from such obligations under this Agreement towards tho 
contracting party applying the restrictions as they determine to be 
appropriate in the circumstances. 

(e) In proceeding under this paragraph, the contracting parties 
shall have due regard to any special external factors adversely affect- 
ing the export trade of the contracting party applying restrictions. 

(f) Determinations under this paragraph shall be rendered ex- 
peditiously and, if possible, within sixty days of the initiation of the 
consultations. 

5. If there is a persistent and widespread application of import 
restrictions under this Article, indicating the existence of a general 
disequilibrium which is restricting international trade, the con- 
tracting parties shall initiate discussions to consider whether other 
measures might be taken, either by those contracting parties the 
balances of payments of which are under pressure or by those the bal- 



207 

ances of payments of which are tending to be exceptionally favour- 
able, or by any appropriate intergovernmental organization, to re- 
move the underlying causes of the disequilibrium. On the invitation 
of the contracting parties, contracting parties shall participate in such 
discussions. 

\ 

ARTICLE XIII NON-DISCRIMINATORY ADMINISTRATION OF QUANTITATIVE 

RESTRICTIONS 

1. No prohibition or restriction shall be applied by any contracting 
party on the importation of any product of the territory of any other 
contracting party or on the exportation of any product destined for 
the territory of any other contracting party, unless the importation of 
the like product of all third countries or the exportation of the like 
product to all third countries is similarly prohibited or restricted. 

2. In applying import restrictions to any product, contracting 
parties shall aim at a distribution of trade in such product approach- 
ing as closely as possible the shares which the various contracting 
parties might be expected to obtain in the absence of such restrictions, 
and to this end shall observe the following provisions : 

(a) Wherever practicable, quotas representing the total amount 
of permitted imports (whether allocated among supplying coun- 
tries or not) shall be fixed, and notice given of their amount in 
accordance with paragraph 3(b) of this Article ; 

(b) In cases in which quotas are not practicable, the restric- 
tions may be applied by means of import licences or permits with- 
out a quota ; 

(c) Contracting parties shall not, except for purposes of oper- 
ating quotas allocated in accordance with subparagraph (d) of 
this paragraph, require that import licences or permits be utilized 
for the importation of the product concerned from a particular 
country or source ; 

(d) In cases in which a quota is allocated among supplying 
countries, the contracting party applying the restrictions may 
seek agreement with respect to the allocation of shares in the 
quota with all other contracting parties having a substantial in- 
terest in supplying the product concerned. In cases in which this 
method is not reasonably practicable, the contracting party con- 
cerned shall allot to contracting parties having a substantial in- 
terest in supplying the product shares based upon the propor- 
tions, supplied by such contracting parties during a previous 
representative period, of the total quantity or value of imports of 
the product, due account being taken of any special factors which 
may have affected or may be affecting the trade in the product. 
No conditions or formalities shall be imposed which would pre- 
vent any contracting party from utilizing fully the share of any 
such total quantity or value which has been allotted to it, subject 
to importation being made within any prescribed period to which 
the quota may relate. 

3. (a) In cases in which import licenses are issued in connection with 
import restrictions, the contracting party applying the restrictions 
shall provide, upon the request of any contracting party having an 
interest in the trade in the product concerned, all relevant information 



208 

concerning the administration of the restrictions, the import licences 
granted over a recent period and the distribution of such licences 
among supplying countries; Provided, That there shall be no obliga- 
tion to supply information as to the names of importing or supplying 
enterprises. 

(b) In the case of import restrictions involving the fixing of quotas, 
the contracting party applying the restrictions shall give public no- 
tice of the total quantity or value of the product or products which will 
be permitted to be imported during a specified future period and of 
any change in such quantity or value. Any supplies of the product in 
question which were en route at the time at which public notice was 
given shall not bo excluded from entry; Provided^ That they may be 
counted so far as practicable, against the quantity permitted to be 
imported in the period in question, and also, where necessary, against 
the quantities permitted to be imported in the next following period or 
periods; and Provided further^ That if any contracting party cus- 
tomarily exempts from such restrictions products entered for con- 
sumption or withdrawn from warehouse for consumption during a 
period of thirty days after the day of such public notice, such practice 
shall be considered full compliance with this sub-paragraph. 

(c) In the case of quotas allocated among supplying countries, the 
contracting party applying the restrictions shall promptly inform all 
other contracting parties having an interest in supplying the product 
concerned of the shares in the quota currently allocated, by quantity 
or value, to the various supplying countries and shall give public 
notice thereof. 

4. With regard to restrictions applied in accordance with paragraph 
2(d) of this Article or under paragraph 2(c) of Article XI, the selec- 
tion of a representative period for any product and the appraisal of 
any special factors affecting the trade in the product shall be made 
initially by the contracting party applying the restriction; Provided. 
That such contracting party shall, upon the request of any other con- 
tracting party having a substantial interest in supplying that product 
or upon the request of the contracting parties, consult promptly with 
the other contracting party or the contracting parties regarding the 
need for an adjustment of the proportion determined or of the base 
period selected, or for the reappraisal of the special factors involved, 
or for the elimination of conditions, formalities or any other provisions 
established unilaterally relating to the allocation of an adequate quota 
or its unrestricted utilization. 

5. The provisions of this Article shall apply to any tariff quota 
instituted or maintained by any contracting party, and, in so far as 
applicable, the principles of this Article shall also extend to export 
restrictions. 

ARTICLE XIV — EXCEPTIONS TO THE RULE OF NON-DISCRIMINATION 13 

1. A contracting party which applies restrictions under Article XII 
or under Section B of Article XVIII may, in the application of such 
restrictions, deviate from the provisions of Article XIII in a manner 

■ Tn^rSS „ aS ^ ame r ( l ed 1 JT eb o uai 7 15. 1961. on which date Annex J was deleted. Originally 
?n£n v.frth/™* 6 ^ 15 '! s P«aal P«*ocol Modifying Article XIV of the G.A.T.T. (62 Stat. 



209 

having equivalent effect to restrictions on payments and transfers for 
current international transactions which that contracting party may 
at that time apply under Article VIII or XIV of the Articles of 
Agreement of the International Monetary Fund, or under analogous 
provisions of a special exchange agreement entered into pursuant to 
paragraph 6 of Article XV. 

2. A contracting party which is applying import restrictions under 
Article XII or under Section B of Article XVIII may, with the con- 
sent of the contracting parties, temporarily deviate from the pro- 
visions of Article XIII in respect of a small part of its external trade 
where the benefits to the contracting party or contracting parties con- 
cerned substantially outweigh any injury which may result to the 
trade of other contracting parties. 

3. The provisions of Article XIII shall not preclude a group of 
territories having a common quota in the International Monetary Fund 
from applying against imports from other countries, but not among 
themselves, restrictions in accordance with the provisions of Article 
XII or of Section B of Article XVIII on condition that such restric- 
tions are in all other respects consistent with the provisions of Article 
XIII. 

4. A contracting party applying import restrictions under Article 
XII or under Section B of Article XVIII shall not be precluded by 
Articles XI to XV or Section B of Article XVIII of this Agreement 
from applying measures to direct its exports in such a manner as to 
increase its earnings of currencies which it can use without deviation 
from the provisions of Article XIII. 

5. A contracting party shall not be precluded by Articles XI to XV, 
inclusive, or by Section B of Article XVIII, of this Agreement from 
applying quantitative restrictions : 

(a) having equivalent effect to exchange restrictions authorized 
under Section 3(b) of Article VII of the Articles of Agreement 
of the International Monetary Fund, or 

(b) under the preferential arrangements provided for in An- 
nex A of this Agreement, pending the outcome of the negotiations 
referred to therein. 

ARTICLE XV EXCHANGE ARRANGEMENTS 

1. The contracting parties shall seek co-operation with the Inter- 
national Monetary Fund to the end that the contracting parties and 
the Fund may pursue a coordinated policy with regard to exchange 
questions within the jurisdiction of the Fund and questions of quanti- 
tative restrictions and other trade measures within the jurisdiction of 
the contracting parties. 

2. In all cases in which the contracting parties are called upon to 
consider or deal with problems concerning monetary reserves, balances 
of payments or foreign exchange arrangements, they shall consult 
fully with the International Monetary Fund. In such consultations, 
the contracting parties shall accept all findings of statistical and other 
facts presented by the Fund relating to foreign exchange, monetary 
reserves and balances of payments, and shall accept the determination 
of the Fund as to whether action by a contracting party in exchange 



210 

matters is in accordance with the Articles of Agreement of the Inter- 
national Monetary Fund, or with the terms of a special exchange 
agreement between that contracting party and the contracting parties. 
The contracting parties, in reaching their final decision in cases involv- 
ing the criteria set forth in paragraph 2(a) of Article XII or in para- 
graph 9 14 of Article XVIII, shall accept the determination of the 
Fund as to what constitutes a serious decline in the contracting party's 
monetary reserves, a very low level of its monetary reserves or a reason- 
able rate of increase in its monetary reserves, and as to the financial 
aspects of other matters covered in consultation in such cases. 

3. The contracting parties shall seek agreement with the Fund 
regarding procedures for consultation under paragraph 2 of this 
Article. 

4. Contracting parties shall not, by exchange action, frustrate the 
intent of the provisions of this Agreement, nor, by trade action, the 
intent of the provisions of the Articles of Agreement of the Inter- 
national Monetary Fund. 

5. If the contracting parties consider, at any time, that exchange 
restrictions on payments and transfers in connection with imports are 
being applied by a contracting party in a manner inconsistent with 
the exceptions provided for in this Agreement for quantitative restric- 
tions, they shall report thereon to the Fund. 

6. Any contracting party which is not a member of the Fund shall, 
within a time to be determined by the contracting parties after consul- 
tation with the Fund, become a member of the Fund, or, failing that, 
enter into a special exchange agreement with the contracting parties. 
A contracting party which ceases to be a member of the Fund shall 
forthwith enter into a special exchange agreement with the contract- 
ing parties. Any special exchange agreement entered into by a con- 
tracting party under this paragraph shall thereupon become part of 
its obligations under this Agreement. 

7. (a) A special exchange agreement betiveen a contracting party 
and the contracting parties under paragraph 6 of this Article shall 
provide to the satisfaction of the contracting parties that the objec- 
tives of this Agreement will not be frustrated as a result of action in 
exchange matters by the contracting party in question. 

(b) The terms of any such agreement shall not impose obligations 
on the contracting party in exchange matters generally more restric- 
tive than those imposed by the Articles of Agreement of the Inter- 
national Monetary Fund on members of the Fund. 

8. A contracting party which is not a member of the Fund shall 
furnish such information within the general scope of section 5 of 
Article VIII of the Articles of Agreement of the International Mone- 
tary Fund as the contracting parties may require in order to carry out 
their functions under this Agreement. 

9. Nothing in this Agreement shall preclude : 15 

(a) the use by a contracting party of exchange controls or ex- 
change restrictions in accordance Avith the Articles of Agreement 
of the International Monetary Fund or with that contracting 

14 References to paragraph 9 added by paragraph K of the Protocol Amending the Pre- 
amble and Parts II and III of the G.A.T.T. (8 UST 1776). 

]5 This clause as amended and restated by Part D of the Protocol Modifying Part II and 
Article XXVI of the G.A.T.T. (62 Stat 3683). 



211 

party's special exchange agreement with the contracting parties, 
or 

(b) the use by a contracting party of restrictions or controls 
on imports or exports, the sole effect of which, additional to the 
effects permitted under Articles XI, XII, XIII and XIV, is to 
make effective such exchange controls or exchange. restrictions. 

ARTICLE XVI SUBSIDIES 

Section A — Subsidies in General 

1. If any contracting party grants or maintains any subsidy, in- 
cluding any form of income or price support, which operates directly 
or indirectly to increase exports of any product from, or to reduce im- 
ports of any product into, its territory, it shall notify the contracting 
parties in writing of the extent and nature of the subsidization, of the 
estimated effect of the subsidization on the quantity of the affected 
product or products imported into or exported from its territory and 
of the circumstances making the subsidization necessary. In any case 
in which it is determined that serious prejudice to the interests of any 
other contracting party is caused or threatened by any such subsidiza- 
tion, the contracting party granting the subsidy shall, upon request, 
discuss with the other contracting party or parties concerned, or with 
the contracting parties, the possibility of limiting the subsidization. 

Section B — Additional Provisions on Export Subsidies 18 

2. The contracting parties recognize that the granting by a con- 
tracting party of a subsidy on the export of any product may have 
harmful effects for other contracting parties, both importing and ex- 
porting, may cause undue disturbance to their normal commercial in- 
terests, and may hinder the achievement of the objectives of this 
Agreement. 

3. Accordingly, contracting parties should seek to avoid the use of 
subsidies on the export of primary products. If, however, a contracting 
party grants directly or indirectly any form of subsidy which operates 
to increase the export of any primary product from its territory, such 
subsidy shall not be applied in a manner which results in that con- 
tracting party having more than an equitable share of world export 
trade in that product, account being taken of the shares of the con- 
tracting parties in such trade in the product during a previous repre- 
sentative period, and any special factors which may have affected or 
may be affecting such trade in the product. 

4. Further, as from 1 January 1958 or the earliest practicable date 
thereafter, contracting parties shall cease to grant either directly or 
indirectly any form of subsidy on the export of any product other 
than a primary product which subsidy results in the sale of such prod- 
uct for export at a price lower than the comparable price charged 
for the like product to buyers in the domestic market, Until 31 Decem- 
ber 1957 no contracting party shall extend the scope of any such sub- 

19 This section added hv Pnrt 1, of the Protocol Amending the Preamble and Parts II and 
III of the G.A.T.T. (S UST 1776). 



212 

sidization beyond that existing on 1 January 1955 by the introduction 
of new,'or the extension of existing, subsidies. 

5. The contracting parties shall review the operation of the pro- 
visions of this Article from time to time with a view to examining its 
effectiveness, in the light of actual experience, in promoting the ob- 
jectives of this Agreement and avoiding subsidization seriously prej- 
udicial to the trade or interests of contracting parties. 

ARTICLE XVII STATE TRADING ENTERPRISES 17 

1. (a) Each contracting party undertakes that if it establishes or 
maintains a State enterprise, wherever located, or grants to any 
enterprise, formally or in effect, exclusive or special privileges, such 
enterprise shall, in its purchases or sales involving either imports or 
exports, act in a manner consistent with the general principles of 
nondiscriminatory treatment prescribed in this Agreement for govern- 
mental measures affecting imports or exports by private traders. 

(b) The provision of sub-paragraph (a) of this paragraph shall be 
understood to require that such enterprises shall, having due regard 
to the other provisions of this Agreement, make any such purchases 
or sales solely in accordance with commercial considerations, includ- 
ing price, quality, availability, marketability, transportation and other 
conditions of purchase or sale, and shall afford the enterprises of the 
other contracting parties adequate opportunity, in accordance with 
customary business practice, to compete for participation in such pur- 
chases or sales. 

(c) No contracting party shall prevent any enterprise (whether or 
not an enterprise described in sub-paragraph (a) of this paragraph) 
under its jurisdiction from acting in accordance with the principles 
of sub-paragraphs (a) and (b) of this paragraph. 

2. The provisions of paragraph 1 of this Article shall not apply to im- 
ports of products for immediate or ultimate consumption in govern- 
mental use and not otherwise for resale or use in the production of 
goods for sale. With respect to such imports, each contracting party 
shall accord to the trade of the other contracting parties fair and 
equitable treatment. 

3. 17 The contracting parties recognize that enterprises of the kind de- 
scribed in paragraph 1(a) of this Article mi^ht be operated so as to 
create serious obstacles to trade; thus negotiations on a reciprocal 
and mutually advantageous basis designed to limit or reduce such ob- 
stacles are of importance to the expansion of international trade. 

4. 17 (a) Contracting parties shall notify the contracting parties of 
the products which are imported into or exported from their territories 
by enterprises of the kind described in paragraph 1(a) of this Article. 

(b) A contracting party establishing, maintaining or authorizing an 
import monopoly of a product, which is not the subject of a conces- 
sion under Article IT, shall, on the request of another contracting 
party having a substantial trade in the product concerned, inform the 
contracting parties of the import markup on the product during a re- 
cent representative period, or, when it is not possible to do so, of tho 
price charged on tho resale of the product. 

17 Sections 3 and 4 nnd the title to Article XVII added bv Part M of the Protocol Amend- 
ing the Preamble and Parts II and III of the G.A.T.T. (8 UST 1777). 



213 

(c) The contracting parties may, at the request of a contracting 
party which has reason to believe that its interests under this Agree- 
ment are being adversely affected by the operations of an enter- 
prise of the kind described in paragraph 1(a), request the contracting 
party establishing, maintaining or authorizing such enterprise to sup- 
ply information about its operations related to the carrying out of the 
provisions of this Agreement. 

(d) The provisions of this paragraph shall not require any contract- 
ing party to disclose confidential information which would impede 
law enforcement or otherwise be contrary to the public interest or 
would prejudice the legitimate commercial interests of particular 
enterprises. 

ARTICLE XVIII GOVERNMENTAL ASSISTANCE TO ECONOMIC 

DEVELOPMENT 13 

1. The contracting parties recognize that the attainment of the ob- 
jectives of this Agreement will be facilitated by the progressive de- 
velopment of their economies, particularly of those contracting parties 
the economies of which can only support low standards of living and 
are in the early stages of development. 

2. The contracting parties recognize further that it may be necessary 
for those contracting parties, in order to implement programmes and 
policies of economic development designed to raise the general stand- 
ard of living of their people, to take protective or other measures 
affecting imports, and that such measures are justified in so far as they 
facilitate the attainment of the objectives of this Agreement. They 
agree, therefore, that those contracting parties should enjoy addi- 
tional facilities to enable them (a) to maintain sufficient flexibility in 
their tariff structure to be able to grant the tariff protection required 
for the establishment of a particular industry and (b) to apply quanti- 
tative restrictions for balance of payments purposes in a manner which 
takes full account of the continued high level of demand for imports 
likely to be generated by their programmes of economic development. 

3. The contracting parties recognize finally that with those addi- 
tional facilities which are provided for in Sections A and B of this 
Article, the provisions of this Agreement would normally be sufficient 
to enable contracting parties to meet the requirements of their eco- 
nomic development. They agree, however, that there may be circum- 
stances where no measure consistent with those provisions is prac- 
ticable to permit a contracting party in the process of economic 
development to grant the £rovernmental assistance required to promote 
the establishment of particular industries with a view to raising the 
general standard of living of its people. Special procedures are laid 
down in Sections C and D of this Article to deal with those cases. 

4. (a) Consequently, a contracting party the economy of which can 
only support low standards of living and is in the early stages of de- 
velopment shall be free to deviate temporarily from the provisions of 
the other Articles of this Agreement, as provided in Sections A, B and 
C of this Article. 



* 8 As amended and restated by Part E of the Protocol Modifying Part II and Article 
XXVI of the O.A.T.T. (G2 Stnt. 3684). 



214 

(b) A contracting party the economy of which is in the process of 
development but which does not come within the scope of sub-para- 
graph .(a) above, may submit applications to the contracting parties 
under Section D of this Article. 

5. The contracting parties recognize that the export earnings of con- 
tracting parties the economies of which are of the type described in 
paragraph 4 (a) and (b) above, and which depend on exports of a 
small number of primary commodities may be seriously reduced by a 
decline in the sale of such commodities. Accordingly, when the exports 
of primary commodities by such a contracting party are seriously 
affected by measures taken by another contracting party, it may 
have resort to the consultation provisions of Article XXII of this 
Agreement. 

6. The contracting parties shall review annually all measures 
applied pursuant to the provisions of Sections C and D of this Article. 

Section A 

7. (a) If a contracting party coming within the scope of paragraph 
4(a) of this Article considers it desirable, in order to promote the estab- 
lishment of a particular industry with a view to raising the general 
standard of living of its people, to modify or withdraw a concession 
included in the appropriate Schedule annexed to this Agreement, it 
shall notify the contracting parties to this effect and enter into negoti- 
ations with any contracting party with which such concession was 
initially negotiated, and with any other contracting party deter- 
mined by the contracting parties to have a substantial interest therein. 
If agreement is reached between such contracting parties concerned, 
they shall be free to modify or withdraw concessions under the appro- 
priate Schedules to this Agreement in order to give effect to such 
agreement, including any compensatory adjustments involved. 

(b) If agreement is not reached within sixty days after the notifi- 
cation provided for in sub-paragraph (a) above, the contracting party 
which proposes to modify or withdraw the concession may refer the 
matter to the contracting parties, which shall promptly examine it. If 
they find that the contracting party which proposes to modify or with- 
draw the concession has made every effort to reach an agreement and 
that the compensatory adjustment offered by it is adequate, that con- 
tracting party shall be free to modify or withdraw the concession if 
at the same time, it gives effect to the compensatory adjustment. If the 
contracting parties do not find that the compensation offered by a 
contracting party proposing to modify or withdraw the concession is 
adequate, but find that it has made every reasonable effort to offer 
adequate compensation, that contracting party shall be free to proceed 
with such modification or withdrawal. If such action is taken, any 
other contracting party referred to in subparagraph (a) above shall 
be free to modify or withdraw substantially equivalent concessions 
initially negotiated with the contracting party which has taken the 
action. 

Section B 

8. The contracting parties recognize that contracting parties coming 
within the scope of paragraph 4(a) of this Article tend, when they 



215 

are in rapid process of development, to experience balance of pay- 
ments difficulties arising mainly from efforts to expand their internal 
markets as well as from the instability in their terms of trade. 

9. In order to safeguard its external financial position and to ensure 
a level of reserves adequate for the implementation of its programme 
of economic development, a contracting party coming within the scope 
of paragraph 4 (a) of this Article may, subject to the provisions of par- 
agraphs 10 to 12, control the general* level of its imports by restricting 
the quantity or value of merchandise permitted to be imported ; Pro- 
vided that the import restrictions instituted, maintained or intensi- 
fied shall not exceed those necessary. 

(a) to forestall the threat of, or to stop, a serious decline in its 
monetary reserves, or 

(b) in the case of a contracting party with inadequate monetary 
reserves, to achieve a reasonable rate of increase in its reserves. 

Due regard shall be paid in either case to any special factors which 
may be affecting the reserves of the contracting party or its need for re- 
serves, including, where special external credits or other resources 
are available to it, the need to provide for the appropriate use of such 
credits or resources. 

10. In applying these restrictions, the contracting party may deter- 
mine their incidence on imports of different products or classes of prod- 
ucts in such a way as to give priority to the importation of those prod- 
ucts which are more essential in the light of its policy of economic 
development : Provided that the restrictions are so applied as to avoid 
unnecessary damage to the commercial or economic interests of any 
other contracting party and not to prevent unreasonably the importa- 
tion of any description of goods in minimum commercial quantities 
the exclusion of which would impair regular channels of trade; and 
Provided further that the restrictions are not so applied as to prevent 
the importation of commercial samples or to prevent compliance with 
patent, trademark, copyright or similar procedures. 

11. In carrying out its domestic policies, the contracting party con- 
cerned shall pay due regard to the need for restoring equilibrium in 
its balance of payments on a sound and lasting basis and to the desir- 
ability of assuring an economic employment of productive resources. 
It shall progressively relax any restrictions applied under this Sec- 
tion as conditions improve, maintaining them only to the extent neces- 
sary under the terms of paragraph 9 of this Article and shall eliminate 
them when conditions no longer justify such maintenance; Pro- 
vided that no contracting party shall be required to withdraw or 
modify restrictions on the ground that a change in its development 
policy would render unnecessary the restrictions which it is applying 
under this Section. 

12. (a) Any contracting party applying new restrictions or raising 
the general level of its existing restrictions by a substantial intensi- 
fication of the measures applied under this Section, shall immediately 
after instituting or intensifying such restrictions (or, in circumstances 
in which prior consultation is practicable, before doing so) consult 
with the contracting parties as to the nature of its balance of payments 
difficulties, alternative corrective measures which may be available, 
and the possible effect of the restrictions on the economies of other 
contracting parties. 



216 

(b) On a date to be determined by them, the contracting parties 
shall review all restrictions still applied under this Section on that 
date. Beginning two years after that date, contracting parties apply- 
ing restrictions under this Section shall enter into consultations of the 
type provided for in sub-paragraph (a) above with the contracting 
parties at intervals of approximately, but not less than, two years ac- 
cording to a programme to be drawn up each year by the contracting 
parties; Provided that no consultation under this sub-paragrapn 
shall take place within two years after the conclusion of a consulta- 
tion of a general nature under any other provision of this paragraph. 

(c) (i) If. in the course of consultations with a contracting party 
under sub-paragraph (a) or (b) of this paragraph, the contracting 
parties find that the restrictions are not consistent with the provisions 
of this Section or with those of Article XIII (subject to the provisions 
of Article XIV) , they shall indicate the nature of the inconsistency 
and may advise that the restrictions be suitably modified. 

(ii) If, however, as a result of the consultations, the contracting 
parties determine that the restrictions are being applied in a manner 
involving an inconsistency of a serious nature with the provisions of 
this Section or with those of Article XIII (subject to the provisions 
of Article XIV) and that damage to the trade of any contracting 
party is caused or threatened thereby, they shall so inform the con- 
tracting party applying the restrictions and shall make appropriate 
recommendations for securing conformity with such provisions within 
a specified period. If such contracting party does not comply with 
these recommendations within the specified period, the contracting 
parties may release any contracting party the trade of which is ad- 
versely affected by the restrictions from such obligations under this 
Agreement towards the contracting parties applying the restrictions 
as they determine to be appropriate in the circumstances. 

(d) The contracting parties shall invite any contracting party 
which is applying restrictions under this Section to enter into consul- 
tations with them at the request of any contracting party which can 
establish a prima facie case that the restrictions are inconsistent 
with the provisions of this Section or with those of Article XIII (sub- 
ject to the provisions of Article XIV) and that its trade is adversely 
affected thereby. However, no such invitation shall be issued unless 
the contracting parties have ascertained that direct discussions between 
the contracting parties concerned have not been successful. If, as a 
result of the consultations with the contracting parties no agreement 
js reached and they determine that the restrictions are being applied 
inconsistently with such provisions, and that damage to the trade of 
the contracting party initiating the procedure is caused or threatened 
thereby, they shall recommend the withdrawal or modification of the 
restrictions. If the restrictions are not withdrawn or modified within 
such time as the contracting parties may prescribe, they may release 
the contracting party initiating the procedure from such obligations 
under this Agreement towards the contracting party applying the 
restrictions as they determine to be appropriate in the circumstances. 

(e) If a contracting party against which action has been taken in 
accordance with the last sentence of sub-paragraph (c) (ii) or (d) of 
this paragraph, finds that the release of obligations authorized by the 
contracting parties adversely affects the operation of its programme 



217 

and policy of economic development, it shall be free, not later than 
sixty days after such action is taken, to give written notice to the 
Executive Secretary to the contracting parties of its intention to with- 
draw from this Agreement and such withdrawal shall take effect on 
the sixtieth day following the day on which the notice is received by 
him. 

(f) In proceeding under this paragraph, the contracting parties 
shall have due regard to the factors referred to in paragraph 2 of this 
Article. Determinations under this paragraph shall be rendered expe- 
ditiously and, if possible, within sixty days of the initiation of the 
consultations. 

Section C 

13. If a contracting party coming within the scope of paragraph 
4(a) of this Article finds that governmental assistance is required to 
promote the establishment of a particular industry with a view to rais- 
ing the general standard of living of its people, but that no measure 
consistent with the other provisions of this Agreement is practicable 
to achieve that objective, it may have recourse to the provisions and 
procedures set out in this Section. 

14. 'The contracting party concerned shall notify the contracting 
parties of the special difficulties which it meets in the achievement of 
the objective outlined in paragraph 13 of this Article and shall indi- 
cate the specific measure affecting imports which it proposes to in- 
troduce in order to remedy these difficulties. It shall not introduce 
that measure before the expiration of the time-limit laid down in 
paragraph 15 or 17, as the case may be, or if the measure affects im- 
ports of a product which is the subject of a concession included in the 
appropriate Schedule annexed to this Agreement, unless it has secured 
the concurrence of the contracting parties in accordance with the pro- 
visions of paragraph 18; Provided that, if the industry receiving 
assistance has already started production, the contracting party may, 
after informing the contracting parties, take such measures as may be 
necessary to prevent, during that period, imports of the product or 
products concerned from increasing substantially above a normal level. 

15. If, within thirty days of the notification of the measure, the 
contracting parties do not request the contracting party concerned to 
consult with them, that contracting party shall be free to deviate from 
the relevant provisions of the other Articles of this Agreement to the 
extent necessary to apply the proposed measure. 

16. If it is requested by the contracting parties to do so, the con- 
tracting party concerned shall consult with them as to the purpose 
of the proposed measure, as to alternative measures which may be 
available under this Agreement, and as to the possible effect of the 
measure proposed on the commercial and economic interests of other 
contracting parties. If, as a result of such consultation, the contract- 
ing parties agree that there is no measure consistent with the other 
provisions of this Agreement which is practicable in order to achieve 
the objective outlined in paragraph 13 of this Article, and concur in 
the proposed measure, the contracting party concerned shall be re- 
leased from its obligations under the relevant provisions of the other 
Articles of this Agreement to the extent necessary to apply that 
measure. 



20-039 O - 78 - 15 



218 






17 If within ninety days after the date of the notification of the 
proposed measure under paragraph 14 of this Article, the contracting 
parties have not concurred in such measure, the contracting party con- 
cerned may introduce the measure proposed after informing the con- 
tracting parties. . v A , . 

18. If the proposed measure affects a product which is the subject 
of a concession included in the appropriate Schedule annexed to this 
Agreement, the contracting party concerned shall enter into consul- 
tations with any other contracting party with which the concession 
was initially negotiated, and with any other contracting party deter- 
mined by the contracting parties to have a substantial interest therein. 
The contracting parties shall concur in the measure if they agree that 
there is no measure consistent with the other provisions of this Agree- 
ment which is practicable in order to achieve the objective set forth 
in paragraph 13 of this Article, and if they are satisfied : 

(a) that agreement has been reached with such other contract- 
ing parties as a result of the consultations referred to above, or 

(b) if no such agreement has been reached within sixty days 
after the notification provided for in paragraph 14 has been re- 
ceived by the contracting parties, that the contracting party hav- 
ing recourse to this Section has made all reasonable efforts to reach 
an agreement and that the interests of other contracting parties 
are adequately safeguarded. 

The contracting party having recourse to this Section shall there- 
upon be released from its obligations under the relevant provisions of 
the other Articles of this Agreement to the extent necessary to permit 
it to apply the measure. 

19. If a proposed measure of the type described in paragraph 13 
of this Article concerns an industry the establishment of which has 
in the initial period been facilitated by incidental protection afforded 
by restrictions imposed by the contracting party concerned for balance 
of payments purposes under the relevant provisions of this Agree- 
ment, that contracting party may resort to the provisions and pro- 
cedures of this Section ; Provided that it shall not apply the proposed 
measure without the concurrence of the contracting parties. 

20. Nothing in the preceding paragraphs of this Section shall au- 
thorize any deviation from the provisions of Articles I, II and XIII 
of this Agreement. The provisos to paragraph 10 of this Article shall 
also be applicable to any restriction under this Section. 

21. At any time while a measure is being applied under paragraph 
17 of this Article any contracting party substantially affected by it 
may suspend the application to the trade of the contracting party hav- 
ing recourse to this Section of such substantially equivalent conces- 
sions or other obligations under this Agreement the suspension of 
which the contracting parties do not disapprove ; Provided that sixty 
days' notice of such suspension is given to the contracting parties not 
later than six months after the measure has been introduced or changed 
substantially to the detriment of the contracting party affected. Any 
such contracting party shall afford adequate opportunity for consul- 
tation in accordance with the provisions of Article XXII of this 
Agreement. * 






219 

Section D 

22. A contracting party coming within the scope of subparagraph 
4(b) of this Article desiring, in the interest of the development of its 
economy, to introduce a measure of the type described in paragraph 
13 of this Article in respect of the establishment of a particular in- 
dustry may apply to the contracting parties for approval of such meas- 
ure. The contracting parties shall promptly consult with such con- 
tracting party and shall, in making their decision be guided by the 
considerations set out in paragraph 16. If the contracting parties 
concur in the proposed measure the contracting party concerned shall 
be released from its obligations under the relevant provisions of 
the other Articles of this agreement to the extent necessary to permit 
it to apply the measure. If the proposed measure affects a product 
which is the subject of a concession included in the appropriate Sched- 
ule annexed to this Agreement, the provisions of paragraph 18 shall 
apply. 

23. Any measure applied under this Section shall comply with the 
provisions of paragraph 20 of this Article. 

ARTICLE XIX EMERGENCY ACTION ON IMPORTS OF PARTICULAR PRODUCTS 

1. (a) If, as a result of unforeseen developments and of the effect 
of the obligations incurred by a contracting party under this Agree- 
ment, including tariff concessions, any product is being imported into 
the territory of that contracting party in such increased quantities and 
under such conditions as to cause or threaten serious injury to domestic 
producers in that territory of like or directly competitive products, 
the contracting party shall be free, in respect of such product, and to 
the extent and for such time as may be necessary to prevent or remedy 
such injury, to suspend the obligation in whole or in part or to with- 
draw or modify the concession. 

(b) If any product, which is the subject of a concession with respect 
to a preference, is being imported into the territory of a contracting 
party in the circumstances set forth in sub-paragraph (a) of this para- 
graph, so as to cause or threaten serious injury to domestic producers 
of like or directly competitive products in the territory of a contract- 
ing party which receives or received such preference, the importing 
contracting party shall be free, if that other contracting party so re- 
quests, to suspend the relevant obligation in whole or in part or to 
withdraw or modify the concession in respect of the product, to the 
extent and for such time as may be necessary to prevent or remedy 
such injury. 

2. Before any contracting party shall take action pursuant to the pro- 
visions of paragraph 1 of this Article, it shall give notice in writing to 
the contracting parties as far in advance as may be practicable and shall 
afford the contracting parties and those contracting parties having 
a substantial interest as exporters of the product concerned an oppor- 
tunity to consult with it in respect of the proposed action. When such 
notice is given in relation to a concession with respect to a preference, 
the notice shall name the contracting party which has requested the 
action. In critical circumstances, where delay would cause damage 
which it would be difficult to repair, action under paragraph 1 of this 
Article may be taken provisionally without prior consultation, on the 



220 

condition that consultation shall be effected immediately after taking 
such action. 

3. (a) If agreement among the interested contracting parties with 
respect to the action is not reached, the contracting party which pro- 
poses to take or continue the action shall, nevertheless, be free to do 
so, and if such action is taken or continued, the affected contracting 
parties shall then be free, not later than ninety days after such action 
is taken, to suspend, upon the expiration of thirty days from the day 
on which written notice of such suspension is received by the contract- 
ing parties, the application to the trade of the contracting party taking 
such action, or, in the case envisaged in paragraph 1(b) of this Article, 
to the trade of the contracting party requesting such action, of such 
substantially equivalent concessions or other obligations 19 under this 
Agreement the suspension of which the contracting parties do not 
disapprove. 

(b) Notwithstanding the provisions of sub-paragraph (a) of this 
paragraph, where action is taken under paragraph 2 of this Article 
without prior consultation and causes or threatens serious injury in 
the territory of a contracting party to the domestic producers of prod- 
ucts affected by the action, that contracting party shall, where delay 
would cause damage difficult to repair, be free to suspend, upon the 
taking of the action and throughout the period of consultation, such 
concessions or other obligations as may be necessary to prevent or 
remedy the injury. 

ARTICLE XX — GENERAL EXCEPTIONS 

Subject to the requirement that such measures are not applied in a 
manner which would constitute a means of arbitrary or unjustifiable 
discrimination between countries where the same conditions prevail, 
or a disguised restriction on international trade, nothing in this Agree- 
ment shall be construed to prevent the adoption or enforcement by 
any contracting party of measures : 

(a) necessary to protect public morals; 

(b) necessary to protect human, animal or plant life or health; 

(c) relating to the importation or exportation of gold or silver ; 

(d) necessary to secure compliance with laws or regulations 
which are not inconsistent with the provisions of this Agreement, 
including those relating to customs enforcement, the enforcement 
of monopolies operated under paragraph 4 of Article II and 
Article XVII, the protection of patents, trademarks and copy- 
rights, and the prevention of deceptive practices ; 

(e) relating to the products of prison labour ; 

(f ) imposed for the protection of national treasures of artistic, 
historic or archaeological value ; 

(g) relating to the conservation of exhaustible natural resources 
if such measures are made effective in conjunction with restrictions 
on domestic production or consumption ; 

(h) 20 undertaken in pursuance of obligations under any inter- 

» The words "concessions or other obligations" were substituted for "obligations or con- 
cessions" by Part O of the Protocol Amending the Preamble and Parts II and III of the 
G.A.T.T. (8 UST 1786). 

80 Sections (h) and (j) as amended and restated bv Part P of the Protocol Amending the 
Preamble and Parts II and III of the G.A.T.T. (8 UST 1786). 



221 

governmental commodity agreement which conforms to criteria 
submitted to the contracting parties and not disapproved by them 
or which is itself so submitted and not so disapproved ; 

(i) involving restrictions on exports of domestic materials nec- 
essary to assure essential quantities of such materials to a domestic 
processing industry during periods when the domestic price of 
such materials is held below the world price as part of a govern- 
mental stabilization plan; Provided that such restrictions shall 
not operate to increase the exports of or the protection afforded to 
such domestic industry, and shall not depart from the provisions 
of this Agreement relating to non-discrimination; 

(j) 20 essential to the acquisition or distribution of products in 
general or local short supply; Provided that any such measures 
shall be consistent with the principle that all contracting parties 
are entitled to an equitable share of the international supply of 
such products, and that any such measures, which are inconsistent 
with the other provisions of this Agreement shall be discontinued 
as soon as the conditions giving rise to them have ceased to exist. 
The contracting parties shall review the need for this sub-para- 
graph not later than 30 June 1960. 

ARTICLE XXI — SECURITY EXCEPTIONS 

Nothing in this Agreement shall be construed 

(a) to require any contracting party to furnish any information 
the disclosure of which it considers contrary to its essential se- 
curity interests ; or 

(b) to prevent any contracting party from taking any action 
which it considers necessary for the protection of its essential 
security interests 

(i) relating to fissionable materials or the materials from 
which they are derived ; 

(ii) relating to the traffic in arms, ammunition and imple- 
ments of war and to such traffic in other goods and materials 
as is carried on directly or indirectly for the purpose of sup- 
plying a military establishment; 

(iii) taken in time of war or other emergency in interna- 
tional relations; or 

(c) to prevent any contracting party from taking any action in 
pursuance of its obligations under the "United Nations Charter for 
the maintenance of international peace and security. 

ARTICLE XXII CONSULTATION 21 

1. Each contracting party shall accord sympathetic consideration to, 
and shall afford adequate opportunity for consultation regarding, such 
representations as may be made by another contracting party with re- 
spect to any matter affecting the operation of this Agreement. 

2. The contracting parties may, at the request of a contract- 
ing party, consult with any contracting party or parties in re- 

"As amended and restated by Part Q of the Protocol Amending the Preamble and 
Parts II and III of the G.A.T.T. (8 UST 1787). 



222 

spect of any matter for which it has not been possible to find a satis- 
factory solution through consultation under paragraph 1. 

ARTICLE XXIII — NULLIFICATION OR IMPAIRMENT 

1. If any contracting party should consider that any benefit accruing 
to it directly or indirectly under this Agreement is being nullified or 
impaired or that the attainment of any objective of the Agreement is 
being impeded as the result of (a) the failure of another contracting 
party to carry out its obligations under this Agreement, or (b) the 
application by another contracting party of any measure, whether or 
not it conflicts with the provisions of this Agreement, or (c) the ex- 
istence of any other situation, the contracting party may, with a view 
to the satisfactory adjustment of the matter, make written representa- 
tions or proposals to the other contracting party or parties which it 
considers to be concerned. Any contracting party thus approached 
shall give sympathetic consideration to the representations or pro- 
posals made to it. 

2. If no satisfactory adjustment is effected between the contracting 
parties concerned within a reasonable time, or if the difficulty is of the 
type described in paragraph 1(c) of this Article, the matter may be 
referred to the contracting parties. The contracting parties shall 
promptly investigate any matter so referred to them and shall make 
appropriate recommendations to the contracting parties which they 
consider to be concerned, or give a ruling on the matter, as appropriate. 
The contracting parties may consult with contracting parties, with the 
Economic and Social Council of the United Nations and with any 
appropriate inter-governmental organization in cases where they 
consider such consultation necessary. 

If the contracting parties consider that the circumstances are 
serious enough to justify such action, they may authorize a con- 
tracting party or parties to suspend the application to any other con- 
tracting party or parties of such concessions or other obligations under 
this Agreement as they determine to be appropriate in the circum- 
stances. If the application to any contracting party of any concession 
or other obligation is in fact suspended, that contracting party shall 
then be free, not later than sixty days after such action is taken to give 
written notice to the Executive Secretary to the contracting parties 
of its intention to withdraw from this Agreement and such with- 
drawal shall take effect upon the sixtieth day following the day on 
which such notice is received by him. 22 

Part III 

ARTICLE XXIV — TERRITORIAL APPLICATION — FRONTIER TRAFFIC CUSTOMS 



UNIONS AND FREE-TRADE AREAS 



M 



1. The provisions of this Agreement shall apply to the metropolitan 
customs territories of the contracting parties and to any other cus- 
toms territories in respect of which this Agreement has been accepted 

** Paragraph added by the Protocol Amending the Preamble and Parts II and III of the 
O.A.T.T. (8 UST 1787). 

"As amended and restated by the Special Protocol Relating to Article XXIV of the 
O.A.T.T. (62 Stat. 2013). 



223 

under Article XXVI or is being applied under Article XXXIII or 
pursuant to the Protocol of Provisional Application. Each such cus- 
toms territory shall, exclusively for the purposes of the territorial ap- 
plication of this Agreement, be treated as though it were a contracting 
party; Provided that the provisions of this paragraph shall not be 
construed to create any rights or obligations as between two or more 
customs territories in respect of which this Agreement has been ac- 
cepted under Article XXVI or is being applied under Article XXXIII 
or pursuant to the Protocol of Provisional Application by a single 
contracting party. 

2. For the purposes of this Agreement customs territory shall be 
understood to mean any territory with respect to which separate tar- 
iffs or other regulations of commerce are maintained for a substantial 
part of the trade of such territory with other territories. 

3. The provisions of this Agreement shall not be construed to 
prevent : 

(a) advantages accorded by any contracting party to adjacent 
countries in order to facilitate frontier traffic ; 

(b) advantages accorded to the trade with the Free Territory 
of Trieste by countries contiguous to that territory, provided that 
such advantages are not in conflict with the Treaties of Peace 
arising out of the Second World War. 

4. 24 The contracting parties recognize the desirability of increasing 
freedom of trade by the development, through voluntary agreements, 
of closer integration between the economies of the countries parties to 
such agreements. They also recognize that the purpose of a customs 
union or of a free-trade area should be to facilitate trade between the 
constituent territories and not to raise barriers to the trade of other 
contracting parties with such territories. 

5. Accordingly, the provisions of this Agreement shall not prevent, 
as between the territories of contracting parties, the formation of a 
customs union or of a free-trade area or the adoption of an interim 
agreement necessary for the formation of a customs union or of a free- 
trade area ; Provided that : 

(a) with respect to a customs union, or an interim agreement 
leading to the formation of a customs union, the duties and other 
regulations of commerce imposed at the institution of any such 
union or interim agreement in respect of trade with contracting 
parties not parties to such union or agreement shall not on the 
whole be higher or more restrictive than the general incidence of 
the duties and regulations of commerce applicable in the constit- 
uent territories prior to the formation of such union or the adop- 
tion of such interim agreement, as the case may be ; 

(b) with respect to a free-trade area, or an interim agreement 
leading to the formation of a free-trade area, the duties and other 
regulations of commerce maintained in each of the constituent ter- 
ritories and applicable at the formation of such free-trade area or 
the adoption of such interim agreement to the trade of contracting 
parties not included in such area or not parties to such agreement 
shall not be higher or more restrictive than the corresponding 
duties and other regulations of commerce existing in the same 

"As amended and restated .by Part S of the Protocol Amending the Preamble and Parti 
II and III of the G.A.T.T. (8 UST 1788). 



224 

constituent territories prior to the formation of the free-trade 
area, or interim agreement, as the case may be ; and 

-(c) any interim agreement referred to in sub-paragraphs (a) 
and (b) shall include a plan and schedule for the formation of 
such a customs union or of such a free-trade area within a reason- 
able length of time. 

6. If, in fulfilling the requirements of sub-paragraph 5(a), a con- 
tracting party proposes to increase any rate of duty inconsistently 
with the provisions of Article II, the procedure set forth in Article 
XXVIII shall apply. In providing for compensatory adjustment, due 
account shall be taken of the compensation already afforded by the 
reductions brought about in the corresponding duty of the other con- 
stituents of the union. 

7. (a) Any contracting party deciding to enter into a customs union 
or free-trade area, or an interim agreement leading to the formation 
of such a union or area, shall promptly notify the contracting parties 
and shall make available to them such information regarding the 
proposed union or area as will enable them to make such reports and 
recommendations to contracting parties as they may deem appropriate. 

(b) If, after having studied the plan and schedule included in an 
interim agreement referred to in paragraph 5 in consultation with the 
parties to that agreement and taking due account of the information 
made available in accordance with the provisions of sub-paragraph 
(a), the contracting parties find that such agreement is not likely to 
result in the formation of a customs union or of a free-trade area within 
the period contemplated by the parties to the agreement or that such 
period is not a reasonable one, the contracting parties shall make 
recommendations to the parties to the agreement. The parties shall not 
maintain or put into force, as the case may be, such agreement if they 
are not prepared to modify it in accordance with these recommenda- 
tions. 

(c) Any substantial change in the plan or schedule referred to in 
paragraph 5(c) shall be communicated to the contracting parties, 
which may request the contracting parties concerned to consult with 
them if the change seems likely to jeopardize or delay unduly the 
formation of the customs union or of the free-trade area. 

8. For the purposes of this Agreement : 

(a) A customs union shall be understood to mean the substitu- 
tion of a single customs territory for two or more customs terri- 
tories, so that 

(i) duties and other restrictive regulations of commerce 
(except, where necessary, those permitted under Article XI, 
XII, XIII, XIV, XV and XX) are eliminated with respect 
to substantially all the trade between the constituent terri- 
tories of the union or at least with respect to substantially all 
the trade in products originating in such territories, and, 

(ii) subject to the provisions of paragraph 9, substantially 
the same duties and other regulations of commerce are ap- 
plied by each of the members of the union to the trade of 
territories not included in the union ; 

(b) A free-trade area shall be understood to mean a group of 
two or more customs territories in which the duties and other re- 
strictive regulations of commerce (except, where necessary, those 



225 

permitted under Articles XI, XII, XIII, XIV, XV and XX) are 

eliminated on substantially all the trade between the constituent 
territories in products originating in such territories. 

9. The preferences referred to in paragraph 2 of Article I shall not 
be affected by the formation of a customs union or of a free-trade area 
but may be eliminated or adjusted by means of negotiations with con- 
tracting parties affected. This procedure of negotiations with affected 
contracting parties shall, in particular, apply to the elimination of 
preferences required to conform with the provisions of paragraph 
8(a) (i) and paragraph 8(b). 

10. The contracting parties may by a two-thirds majority approve 
proposals which do not fully comply with the requirements of para- 
graphs 5 to 9 inclusive, provided that such proposals lead to the forma- 
tion of a customs union or a free-trade area in the sense of this Article. 

11. Taking into account the exceptional circumstances arising out 
of the establishment of India and Pakistan as independent States and 
recognizing the fact that they have long constituted an economic unit, 
the contracting parties agree that the provisions of this Agreement 
shall not prevent the two countries from entering into special arrange- 
ments with respect to the trade between them, pending the establish- 
ment of their mutual trade relations on a definitive basis. 

12. Each contracting party shall take such reasonable measures as 
may be available to it to ensure observance of the provisions of this 
Agreement by the regional and local governments and authorities 
within its territory. 

ARTICLE XXV — JOINT ACTION BY THE CONTRACTING PARTIES 

1. Representatives of the contracting parties shall meet from time 
to time for the purpose of giving effect to those provisions of this 
Agreement which involve joint action and, generally, with a view to 
facilitating the operation and furthering the objectives of this Agree- 
ment. Wherever reference is made in this Agreement to the contract- 
ing parties acting jointly they are designated as the contracting 
parties. 

2. The Secretary-General of the United Nations is requested to con- 
vene the first meeting of the contracting parties, which shall take place 
not later than March 1, 1948. 

3. Each contracting party shall be entitled to have one vote at all 
meetings of the contracting parties. 

4. Except as otherwise provided for in this Agreement, decisions of 
the contracting parties shall be taken by a majority of the votes cast. 

5. 25 In exceptional circumstances not elsewhere provided for in this 
Agreement, the contracting parties may waive an obligation imposed 
upon a contracting party by this Agreement ; Provided that any such 
decision shall be approved by a two-thirds majority of the votes cast 
and that such majority shall comprise more than half of the contract- 
ing parties. The contracting parties may also by such a vote 

"As amended and restated bv the Protocol Modifying Certain Provisions of the G.A.T.T. 
(62 Stat. 1992). Subparagraphs (b), (c) and (d) deleted by the Protocol Amending the 
Preamble and Parts II and III of the G.A.T.T. (8 UST 1788). 

The word "paragraph" has been substituted for the word "sub-paragraph," since para- 
graph 5 is no longer divided into sub paragraphs (a), (b), etc., as was formerly the case. 
The text of the present paragrapli 5 was formerly sub-paragraph 5(a). 



226 

(i) define certain categories of exceptional circumstances to 
which other voting requirements shall apply for the waiver of 
obligations, and 

(ii) prescribe such criteria as may be necessary for the applica- 
tion of this paragraph. 

ARTICLE XXVI ACCEPTANCE, ENTRY INTO FORCE AND REGISTRATION 26 

1. The date of this Agreement shall be 30 October 1947. 

2. This Agreement shall be open for acceptance by any contracting 
party which, on 1 March 1955, was a contracting party or was nego- 
tiating with a view to accession to this Agreement. 

3. This Agreement, done in a single English original and in a single 
French original, both texts authentic, shall be deposited with the 
Secretary-General of the United Nations, who shall furnish certified 
copies thereof to all interested governments. 

i. 2r Each government accepting this Agreement shall deposit an 
instrument of acceptance with the Executive Secretary of the contract- 
ing parties who will inform all interested governments of the date of 
deposit of each instrument of acceptance and of the day on which this 
Agreement enters into force under paragraph 6 of this Article. 

5. (a) Each government accepting this Agreement does so in re- 
spect of its metropolitan territory and of the other territories for 
which it has international responsibility, except such separate customs 
territories as it shall notify to the Executive Secretary to the contract- 
ing parties at the time of its own acceptance. 

(b) Any government, which has so notified the Executive Secretary 
under the exceptions in sub-paragraph (a) of this paragraph, may 
at any time give notice to the Executive Secretary that its acceptance 
shall be effective in respect of any separate customs territory or terri- 
tories so excepted and such notice shall take effect on the thirtieth 
day following the day on which it is received by the Executive 
Secretary. 

(c) If any of the customs territories, in respect of which a con- 
tracting party has accepted this Agreement, possesses or acquires full 
autonomy in the conduct of its external commercial relations and of 
the other matters provided for in this Agreement, such territory shall, 
upon sponsorship through a declaration by the responsible contract- 
ing party establishing the above-mentioned fact, be deemed to be a 
contracting party. 

6. This Agreement shall enter into force, as among the governments 
which have accepted it, on the thirtieth day following the day on 
which instruments of acceptance have been deposited with the Execu- 
tive Secretary to the contracting parties on behalf of governments 
named in Annex H, the territories of which account for 85 per centum 
of the total external trade of the territories of such governments, com- 
puted in accordance with the applicable column of percentages set 
forth therein. The instrument of acceptance of each other government 

28 As amended and restated by Part U of the Protocol Amending the Preamble and Parts 
II and III of the Q.A.T.T. (8 UST 1788). 

27 The last sentence was added by Part V of the Protocol Amending the Preamble and 
Parts II and III of the O.A.T.T. (8 UST 1789). 



227 

shall take effect on the thirtieth day following the day on which such 
instrument has been deposited. 

7. The United Nations is authorized to effect registration of this 
Agreement as soon as it enters into force. 

ARTICLE XXVII — WITHHOLDING OR WITHDRAWAL OF CONCESSIONS 

Any contracting party shall at any time be free to withhold or to 
withdraw in whole or in part any concession, provided for in the 
appropriate Schedule annexed to this Agreement, in respect of which 
such contracting party determines that it was initially negotiated with 
a government which has not become, or has ceased to be, a contract- 
ing party. A contracting party taking such action shall notify the 
contracting parties and, upon request, consult with contracting parties 
which have a substantial interest in the product concerned. 28 

ARTICLE XXVIII MODIFICATION OF SCHEDULES 29 

1. On the first day of each three-year period, the first period be- 
ginning on 1 January 1958 (or on the first day of any other period 
that may be specified by the contracting parties by two-thirds of the 
votes cast) a contracting party (hereafter in this Article referred to 
as the "applicant contracting party") may, by negotiation and agree- 
ment with any contracting party with which such concession was 
initially negotiated and with any other contracting party determined 
by the contracting parties to have a principal supplying interest 
(which two preceding categories of contracting parties, together with 
the applicant contracting party, are in this Article hereinafter referred 
to as the "contracting parties primarily concerned"), and subject to 
consultation with any other contracting party determined by the con- 
tracting parties to have a substantial interest in such concession, 
modify or withdraw a concession included in the appropriate Schedule 
annexed to this Agreement. 

2. In such negotiations and agreement, which may include provision 
for compensatory adjustment with respect to other products, the con- 
tracting parties concerned shall endeavour to maintain a general level 
of reciprocal and mutually advantageous concessions not less favour- 
able to trade than that provided for in this Agreement prior to such 
negotiations. 

3. (a) If agreement between the contracting parties primarily con- 
cerned cannot be reached before 1 January 1958 or before the expira- 
tion of a period envisaged in paragraph 1 of this Article, the con- 
tracting party which proposes to modify or withdraw the concession 
shall, nevertheless, be free to do so and if such action is taken any con- 
tracting party with which such concession was initially negotiated, 
any contracting party determined under paragraph 1 to have a prin- 
cipal supplying interest and any contracting party determined under 
paragraph 1 to have a substantial interest shall then be free not later 
than six months after such action is taken, to withdraw, upon the 
expiration of thirty days from the day on which written notice of such 
withdrawal is received by the contracting parties, substantially equiva- 

» As amended and restated by the Protocol Modifying Article XXVI of the Agreement 
of October 30, 1947 (2 UST 1583). 

"As amended and restated bv Part W of the Protocol Amending the Preamble and Parti 
II and III of the G.A.T.T. (18 UST 1788). 



228 

lent concessions initially negotiated with the applicant contracting 
party. 

(b) If agreement between the contracting parties primarily con- 
cerned' is reached but any other contracting party determined under 
paragraph 1 of this Article to have a substantial interest is not satis- 
fied, such other contracting party shall be free, not later than six 
months after action under such agreement is taken, to withdraw, upon 
the expiration of thirty days from the day on which written notice 
of such withdrawal is received by the contracting parties, substantially 
equivalent concessions initially negotiated with the applicant contract- 
ing party. 

4. The contracting parties may, at any time, in special circum- 
stances, authorize a contracting party to enter into negotiations for 
modification or withdrawal of a concession included in the appropriate 
Schedule annexed to this Agreement subject to the following proce- 
dures and conditions: 

(a) Such negotiations and any related consultations shall be con- 
ducted in accordance with the provisions of paragraphs 1 and 2 of 
this Article. 

(b) If agreement between the contracting parties primarily con- 
cerned is reached in the negotiations, the provisions of paragraph 3(b) 
of this Article shall apply. 

(c) If agreement between the contracting parties primarily con- 
cerned is not reached within a period of sixty days after negotiations 
have been authorized, or within such longer period as the contracting 
parties may have prescribed the applicant contracting party may 
refer the matter to the contracting parties. 

(d) Upon such reference, the contracting parties shall promptly 
examine the matter and submit their views to the contracting parties 
primarily concerned with the aim of achieving a settlement. If a settle- 
ment is reached, the provisions of paragraph 3(b) shall apply as if 
agreement between the contracting parties primarily concerned had 
been reached. If no settlement is reached between the contracting par- 
ties primarily concerned, the applicant contracting party shall be free 
to modify or withdraw the concession, unless the contracting parties 
determine that the applicant contracting party has unreasonably failed 
to offer adequate compensation. If such action is taken, any contract- 
ing party with which the concession was initially negotiated, any con- 
tracting party determined under paragraph 4(a) to have a principal 
supplying interest and any contracting party determined under para- 
graph 4(a) to have a substantial interest, shall be free, not later than 
six months after such action is taken, to modify or withdraw, upon 
the expiration of thirty days from the day on which written notice of 
such withdrawal is received by the contracting parties, substantially 
equivalent concessions initially negotiated with the applicant contract- 
ing party. 

5. Before 1 January 1958 and before the end of any period envis= 
aged in paragraph 1 a contracting party may elect by notifying the 
contracting parties to reserve the right, for the duration of the next 
period, to modify the appropriate Schedule in accordance with the 
procedures of paragraphs 1 to 3. If a contracting party so elects, other 
contracting parties shall have the right, during the same period, to 
modify or withdraw, in accordance with the same procedures, conces- 
sions initially negotiated Willi that contracting party. 



229 

ARTICLE XXVIII BIS TARIFF NEGOTIATIONS 30 

1. The contracting parties recognize that customs duties often con- 
stitute serious obstacles to trade; thus negotiations on a reciprocal and 
mutually advantageous basis, directed to the substantial reduction of 
the general level of tariffs and other charges on imports and exports 
and in particular to the reduction of such high tariffs as discourage 
the importation even of minimum quantities, and conducted with due 
regard to the objectives of this Agreement and the varying needs of 
individual contracting parties, are of great importance to the expan- 
sion of international trade. The contracting parties may therefore 
sponsor such negotiations from time to time. 

2. (a) Negotiations under this Article may be carried out on a selec- 
tive product-by-product basis or by the application of such multi- 
lateral procedures as may be accepted by the contracting parties con- 
cerned. Such negotiations may be directed towards the reduction of 
duties, the binding of duties at then existing levels or undertakings 
that individual duties or the average duties on specified categories of 
products shall not exceed specified levels. The binding against increase 
of low duties or of duty-free treatment shall, in principle, be recog- 
nized as a concession equivalent in value to the reduction of high 
duties. 

(b) The contracting parties recognize that in general the success of 
multilateral negotiations would depend on the participation of all con- 
tracting parties which conduct a substantial proportion of their exter- 
nal trade with one another. 

3. Negotiations shall be conducted on a basis which affords adequate 
opportunity to take into account: 

(a) the needs of individual contracting parties and individual 
industries; 

(b) the needs of less-developed counties for a more flexible use 
of tariff protection to assist their economic development and the 
special needs of these countries to maintain tariffs for revenue 
purposes; and 

(c) all other relevant circumstances, including the fiscal, devel- 
opmental, strategic and other needs of the contracting parties 
concerned. 

ARTICLE XXIX — THE RELATION OF THIS AGREEMENT TO THE HAVANA 

CHARTER 31 

1. The contracting parties undertake to observe to the fullest extent 
of their executive authority the general principles of Chapters I to 
VI inclusive and of Chapter IX of the Havana Charter pending their 
acceptance of it in accordance with their constitutional procedures. 

2. Part II of this Agreement shall be suspended on the day on 
which the Havana Charter enters into force. 

3. If by September 30, 1949, the Havana Charter has not entered 
into force, the contracting parties shall meet before December 31, 1949, 
to agree whether this Agreement shall be amended, supplemented or 
maintained. 



of niVfj ^TT^sT^tVtoV 116 Protoco1 Am ««ding the Preamble and Parts II and III 
SXIX*of?n?Gfi T T f.?US^S3?7f lirt ° ° f thG Protoco1 Modif . vin « p *rt I and Article 



230 

4. If at any time the Havana Charter should cease to be in force, the 
contracting parties shall meet as soon as practicable thereafter 
to agree whether this Agreement shall be supplemented, amended 
or maintained. Pending such agreement, Part II of this Agreement 
shall again enter into force ; Provided that the provisions of Part II 
other than Article XXIII shall be replaced, mutatis mutandis, in the 
form in which they then appeared in the Havana Charter ; and Pro- 
vided further that no contracting party shall be bound by any provi- 
sions which did not bind it at the time when the Havana Charter 
ceased to be in force. 

5. If any contracting party has not accepted the Havana Charter 
by the date upon which it enters into force, the contracting parties 
shall confer to agree whether, and if so in what way, this Agree- 
ment in so far as it affects relations between such contracting 
party and other contracting parties, shall be supplemented or amended. 
Pending such agreement the provisions of Part II of this Agreement 
shall, notwithstanding the provisions of paragraph 2 of this Article, 
continue to apply as between such contracting party and other con- 
tracting parties. 

6. Contracting parties which are Members of the International 
Trade Organization shall not invoke the provisions of this Agree- 
ment so as to prevent the operation of any provision of the Havana 
Charter. The application of the principle underlying this paragraph 
to any contracting party which is not a Member of the International 
Trade Organization shall be the subject of an agreement pursuant to 
paragraph 5 of this Article. 

ARTICLE XXX AMENDMENTS 

1. Except where provision for modification is made elsewhere in 
this Agreement, amendments to the provisions of Part I of this Agree- 
ment or to the provisions of Article AXIX or of this Article shall be- 
come effective upon acceptance by all the contracting parties, and 
other amendments to this Agreement shall become effective, in respect 
of those contracting parties which accept them, upon acceptance by 
two-thirds of the contracting parties and thereafter for each other 
contracting party upon acceptance by it. 

2. Any contracting party accepting an amendment to this Agree- 
ment shall deposit an instrument of acceptance with the Secretary- 
General of the United Nations within such period as the contract- 
ing parties may specify. The contracting parties may decide that any 
amendment made effective under this Article is of such a nature that 
any contracting party which has not accepted it within a period 
specified by the contracting parties shall be free to withdraw from this 
Agreement, or to remain a contracting party with the consent of the 
contracting parties. 

ARTICLE XXXI WITHDRAWAL 32 

Without prejudice to the provisions of paragraph 12 of Article 
XVIII or of Article XXIII or of paragraph 2 of Article XXX, any 
contracting party may withdraw from this Agreement, or may sep- 

12 As amended by Part Y of the Protocol Amending the Preamble and Parts II and HI 
of the Q.A.T.T. (8 UST 1793). 






231 

arately withdraw on behalf of any of the separate customs territories 
for which it has international responsibility and which at the time 
possesses full autonomy in the conduct of its external commercial re- 
lations and of the other matters provided for in this Agreement. The 
withdrawal shall take effect upon the expiration of six months from 
the day on which written notice of withdrawal is received by the Sec- 
retary-General of the United Nations. 

ARTICLE XXXII CONTRACTING PARTIES 33 

1. The contracting parties to this Agreement shall be understood 
to mean those governments which are applying the provisions of this 
Agreement under Articles XXVI or XXXIII or pursuant to the 
Protocol of Provisional Application. 

2. At any time after the entry into force of this Agreement pursuant 
to paragraph 6 of Article XXVI, those contracting parties which have 
accepted this Agreement pursuant to paragraph 4 of Article XXVI 
may decide that any contracting party which has not so accepted it 
shall cease to be a contracting party. 

ARTICLE XXXin ACCESSION S4 

A government not party to this Agreement, or a government acting 
on behalf of a separate customs territory possessing full autonomy in 
the conduct of its external commercial relations and of the other mat- 
ters provided for in this Agreement, may accede to this Agreement, 
on its own behalf or on behalf of that territory, on terms to be agreed 
between such government and the contracting parties. Decisions of 
the contracting parties under this paragraph shall be taken by a two- 
thirds majority. 

ARTICLE XXXIV — ANNEXES 

The annexes to this Agreement are hereby made an integral part of 
this Agreement. 

ARTICLE XXXV — NON-APPLICATION OF THE AGREEMENT BETWEEN 
PARTICULAR CONTRACTING PARTIES 35 

1. This Agreement, or alternatively Article II of this Agreement 
shall not apply as between any contracting party and any other con- 
tracting party if : 

(a) the two contracting parties have not entered into tariff 
negotiations with each other, and 

(b) either of the contracting parties, at the time either becomes 
a contracting party, does not consent to such application. 

' 2. The contracting parties may review the operation of this Article 
m particular cases at the request of any contracting party and make 
appropriate recommendations. 

ioqo^ S amended bv the Protocol Modifying Certain Provisions of the G.A.T.T. (62 Stat. 

ffi? ^ S amf>nd £ d and restat ed by the Protocol Modifying Certain Provisions of the G.A.T.T. 

» Added by the Protocol Modifying Certain Provisions of the G.A.T.T. (62 Stat. 1992). 
As amended and restated by Part Z of the Protocol Amending the Preamble and Parts II 
and III of the G.A.T.T. (8 UST1793). 



232 

Part IV — Trade and Development 36 

ARTICLE XXXVI PRINCIPLES AND OBJECTIVES 

1. The contracting parties, 

(a) recalling that the basic objectives of this Agreement include 
the raising of standards of living and the progressive develop- 
ment of the economies of all contracting parties, and considering 
that the attainment of these objectives is particularly urgent for 
less-developed contracting parties; 

(b) considering that export earnings of the less-developed con- 
tracting parties can play a vital part in their economic develop- 
ment and that the extent of this contribution depends on the prices 
paid by the less-developed contracting parties for essential im- 
ports, the volume of their exports, and the prices received for 
these exports ; 

(c) noting, that there is a wide gap between standards of living 
in less-developed countries and in other countries; 

(d) recognizing that individual and joint action is essential to 
further the development of the economies of less-developed con- 
tracting parties and to bring about a rapid advance in the stand- 
ards of living in these countries ; 

(e) recognizing that international trade as a means of achiev- 
ing economic and social advancement should be governed by such 
rules and procedures — and measures in conformity with such rules 
and procedures — as are consistent with the objectives set forth 
in this Article ; 

(f ) noting that the contracting parties may enable less-devel- 
oped contracting parties to use special measures to promote their 
trade and development ; 

agree as follows : 

2. There is need for a rapid and sustained expansion of the export 
earnings of the less-developed contracting parties. 

3. There is need for positive efforts designed to ensure that less- 
developed contracting parties secure a share in the growth in inter- 
national trade commensurate with the needs of their economic de- 
velopment. 

4. Given the continued dependence of many less-developed con- 
tracting parties on the exportation of a limited range of primary prod- 
ucts, there is need to provide in the largest possible measure more 
favourable and acceptable conditions of access to world markets for 
these products, and whenever appropriate to devise measures designed 
to stabilize and improve conditions of world markets in these products, 
including in particular measures designed to attain stable, equitable 
and remunerative prices, thus permitting an expansion of world trade 
and demand and a dynamic and steady growth of the real export earn- 
ings of these countries so as to provide them with expanding resources 
for their economic development. 



38 Part IV was added by Sec. 1A of the Protocol to Introduce Part IV (17 UST 1977). 



233 

5. The rapid expansion of the economies of the less-developed con- 
tracting parties will be facilitated by a diversification of the structure 
of their economies and the avoidance of an excessive dependence on 
the export of primary products. There is, therefore, need for increased 
access in the largest possible measure to markets under favourable 
conditions for processed and manufactured products currently or po- 
tentially of particular export interest to less-developed contracting 
parties. 

6. Because of the chronic deficiency in the export proceeds and 
other foreign exchange earnings of less-developed contracting parties, 
there are important inter-relationships between trade and financial 
assistance to development. There is, therefore, need for close and con- 
tinuing collaboration between the contracting parties and the interna- 
tional lending agencies so that they can contribute most effectively 
to alleviating the burdens these less-developed contracting parties as- 
sume in the interest of their economic development. 

7. There is need for appropriate collaboration between the contract- 
ing parties, other intergovernmental bodies and the organs and agen- 
cies of the United Nations system, whose activities relate to the trade 
and economic development of less-developed countries. 

(8) The developed contracting parties do not expect reciprocity for 
commitments made by them in trade negotiations to reduce or remove 
tariffs and other barriers to the trade of less-developed contracting 
parties. 

9. The adoption of measures to give effect to these principles and 
objectives shall be a matter of conscious and purposeful effort on the 
part of the contracting parties both individually and jointly. 

ARTICLE XXXVII — ( ( >M KITH ENTS 

1. The developed contracting parties shall to the fullest extent pos- 
sible — that is, except when compelling reasons, which may include 
legal reasons, make it impossible — give effect to the following 
provisions: 

(a) accord high priority to the reduction and elimination of 
barriers to products currently or potentially of particular export 
interest to less-developed contracting parties, including customs 
duties and other restrictions which differentiate unreasonably be- 
tween such products in their primary and in their processed forms : 

(b) refrain from introducing, or increasing the incidence of, 
customs duties or non-tariff import barriers on products currently 
or potentially of particular export interest to less-developed con- 
tracting parties ; and 

(c) (i) refrain from imposing new fiscal measures, and 

(ii) in any adjustments of fiscal policy accord high priority 
to the reduction and elimination of fiscal measures, 
which would hamper, or which hamper, significantly the growth of 
consumption of primary products, in raw or processed form, wholly or 
mainly produced in the territories of less-developed contracting par- 
ties, and which are applied specifically to those products. 

2. (a) Whenever it is considered that effect is not being given to any 
of the provisions of sub-paragraph (a) , (b) or (c) of paragraph 1, the 



234 

matter shall be reported to the contracting parties either by the con- 
tracting party not so giving effect to the relevant provisions or by any 
other interested contracting party. 

(b) (i) The contracting parties shall, if requested so to do by any 
interested contracting party, and without prejudice to any bilateral 
consultations that may be undertaken, consult with the contracting 
party concerned and all interested contracting parties with respect to 
the matter with a view to reaching solutions satisfactory to all con- 
tracting parties concerned in order to further the objectives set forth 
in Article XXXVI. In the course of these consultations, the reasons 
given in cases where effect was not being given to the provisions of 
sub-paragraph (a), (b) or (c) of paragraph 1 shall be examined. 

(ii) As the implementation of the provisions of sub-paragraph (a), 
(b) or (c) of paragraph 1 by individual contracting parties may in 
some cases be more readilv achieved where action is taken jointly with 
other developed contracting parties, such consultation might, where 
appropriate, be directed towards this end. 

(iii) The consultations by the contracting parties might also, in ap- 
propriate cases, be directed towards agreement on joint action designed 
to further the objectives of this Agreement as envisaged in paragraph 
1 of Article XXV. 

3. The developed contracting parties shall : 

(a) make every effort, in cases where a government directly 
or indirectly determines the resale price of products wholly 
or mainly produced in the territories of less-developed con- 
tracting parties, to maintain trade margins at equitable levels; 

(b) give active consideration to the adoption of other meas- 
ures designed to provide greater scope for the development of 
imports from less-developed contracting- parties and collaborate 
in appropriate international action to this end; 

(c) have special regard to the trade interests of less-develooed 
contracting parties when considering the application of other 
measures permitted under this Agreement to meet particular 
problems and explore all possibilities of constructive remedies 
before applying such measures where they would affect essential 
interests of those contracting parties. 

4. Less-developed contracting parties agree to take appropriate 
action in implementation of the provisions of Part IV for the benefit 
of the trade of other less-developed contracting parties, insofar as 
such action is consistent with their individual present and future de- 
velopment, financial and trade needs taking into account past trade 
developments as well as the trade interests of less-developed contract- 
ing parties as a whole. 

5. In the implementation of the commitments set forth in para- 
graphs 1 to 4 each contracting party shall afford to any other inter- 
ested contracting party or contracting parties full and prompt oppor- 
tunity for consultations under the normal procedures of this Agree- 
ment with respect to any matter or difficulty which may arise. 



235 

ARTICLE XXXVIII JOIXT ACTION 

1. The contracting parties shall collaborate jointly, within the 

framework of this Agreement and elsewhere, as appropriate, to fur- 
ther the objectives set forth in Article XXXVI. 

2. Tn particular, the contracting parties shall : 

(a) where appropriate, take action, including action through 
international arrangements, to provide improved and acceptable 
conditions of access to world markets for primary products of par- 
ticular interest to less-developed contracting parties and to devise 
measures designed to stabilize and improve conditions of world 
markets in these products including measures designed to attain 
stable, equitable and remunerative prices for exports of such 
product-: 

(b) seek appropriate collaboration in matters of trade and 
development policy with the United Nations and its organs 
and agencies, including any institutions that may be created 
on the basis of recommendations by the United Nations Con- 
ference on Trade and Development : 

(c) collaborate in analyzing the development plans and policies 
of individual less-developed contracting parties and in examin- 
ing trade and aid relationships with a view to devising concrete 
measures to promote the development of export potential and 
to facilitate access to export markets for the products of the 
industries thus developed and. in this connexion seek appro- 
priate collaboration with governments and international organi- 
zations, and in particular with organizations having competence 
in relation to financial assistance for economic development, in 
systematic studies of trade and aid relationships in individual 
less-developed contracting parties aimed at obtaining a clear 
analysis of export potential, market prospects and any further 
action that may l>e required : 

(d) keep under continuous review the development of world 
trade with special reference to the rate of growth of the trade 
of less-developed contracting parties and make such recommenda- 
tions to contracting parties as may. in the circumstances, be 
deemed appropriate; 

(e) collaborate in seeking feasible methods to expand trade 
for the purpose of economic development, through international 
harmonization and adjustment of national policies and regula- 
tions, through technical and commercial standards affecting pro- 
duction, transportation and marketing, and through export pro- 
motion by the establishment of facilities for the increased flow of 
trade information and the development of market research; and 

(f) establish such institutional arrangements as may be neces- 
sary to further the objectives set forth in Article XXXVI and 
to give effect to the provisions of this Part. 



236 

ANNEX A-LIST OF TERRITORIES REFERRED TO IN PARAGRAPH 2(A) 

OF ARTICLE I 

United Kingdom of Great Britain and Northern Ireland 

Dependent territories of the United Kingdom of Great Britain 

and Northern Ireland 
Canada 

Commonwealth of Australia 

Dependent territories of the Commonwealth of Australia 
New Zealand 

Dependent territories of New Zealand 
Union of South Africa including South West Africa 
Ireland 

India (as on April 10, 1947) 
Newfoundland 
Southern Rhodesia 
Burma 
Ceylon 

Certain of the territories listed above have two or more preferential 
rates in force for certain products. Any such territory may, by agree- 
ment with the other contracting parties which are principal suppliers 
of such products at the most-favoured-nation rate, substitute for such 
preferential rates a single preferential rate which shall not on the 
whole be less favourable to suppliers at the most-favoured-nation rate 
than the preferences in force prior to such substitution. 

The imposition of an equivalent margin of tariff preference to re- 
place a margin of preference in an internal tax existing on April 10, 
1947, exclusively between two or more of the territories listed in this 
Annex or to replace the preferential quantitative arrangements de- 
scribed in the following paragraph, shall not be deemed to constitute 
an increase in a margin of tariff preference. 

The preferential arrangements referred to in paragraph 5(b) of 
Article XIV are those existing in the United Kingdom on April 10, 
1947, under contractual agreements with the Governments of Canada, 
Australia and New Zealand, in respect to chilled and frozen beef and 
veal, frozen mutton and lamb, chilled and frozen pork, and bacon. It is 
the intention, without prejudice to any action taken under part 1(h) 
of Article XX, that these arrangements shall be eliminated or replaced 
by tariff preferences, and that negotiations to this end shall take place 
as soon as practicable among the countries substantially concerned or 
involved. 

The film hire tax in force in New Zealand on April 10, 1947, shall, 
for the purposes of this Agreement, be treated as a customs duty 
under Article I. The renters' film quota in force in New Zealand on 
April 10, 1947, shall, for the purposes of this Agreement, be treated as 
a screen quota under Article IV. 

The Dominions of India and Pakistan have not been mentioned 
separately in the above list since they had not come into existence as 
such on the base date of April 10, 1947. 



237 

ANNEX B— LIST OF TERRITORIES OF THE FRENCH UNION REFERRED 
TO IN PARAGRAPH 2(b) OF ARTICLE I 

France 

French Equatorial Africa (Treaty Basin of the Congo 37 and other 

territories) 
French West Africa 
Cameroons under French Mandate 37 
French Somali Coast and Dependencies 
French Establishments in India 37 
French Establishments in Oceania 

French Establishments in the Condominium of the New Hebrides 37 
Guadeloupe and Dependencies 
French Guiana 
Indo-China 

Madagascar and Dependencies 
Morocco (French zone) 37 
Martinique 

New Caledonia and Dependencies 
Reunion 

Saint-Pierre and Miquelon 
Togo under French Mandate " 
Tunisia 



ANNEX C— LIST OF TERRITORIES OF THE CUSTOMS UNION OF 
BELGIUM, LUXEMBURG AND THE NETHERLANDS REFERRED TO IN 
PARAGRAPH 2(b) OF ARTICLE I 

The Economic Union of Belgium and Luxemburg 

Belgian Congo 

Ruanda Urundi 

Netherlands 

New Guinea 

Surinam 

Netherlands Antilles 

"Republic of Indonesia 

For imports into the metropolitan territories constituting the 
Customs Union. 



ANNEX D— LIST OF TERRITORIES REFERRED TO IN PARAGRAPH 2(b) 
OF ARTICLE I AS RESPECTS THE UNITED STATES OF AMERICA 

United States of America (customs territory) 
Dependent territories of the United States of America 
Republic of the Philippines 

The imposition of an equivalent margin of tariff preference to re- 
place a margin of preference in an internal tax existing on April 10, 
1947, exclusively between two or more of the territories listed in this 

37 For imports into Metropolitan France and Territories of the French Union. 



238 

Annex shall not be deemed to constitute an increase in a margin of 
tariff presence. 

ANNEX E— LIST OF TERRITORIES COVERED BY PREFERENTIAL 
ARRANGEMENTS BETWEEN CHILE AND NEIGHBOURING COUN- 
TRIES REFERRED TO IN PARAGRAPH 2(d) OF ARTICLE I 

Preferences in force exclusively between Chile on the one hand, and 

1. Argentina 

2. Bolivia 

3. Peru 

on the other hand. 



ANNEX F— LIST OF TERRITORIES COVERED BY PREFERENTIAL 
ARRANGEMENTS BETWEEN LEBANON AND SYRIA AND NEIGHBOUR- 
ING COUNTRIES REFERRED TO IN PARAGRAPH 2(d) OF ARTICLE I 

Preferences in force exclusively between the Lebano-Syrian Customs 
Union, on the one hand, and 

1. Palestine 

2. Trans Jordan 
on the other hand. 



ANNEX G— DATES ESTABLISHING MAXIMUM MARGINS OF PREFER- 
ENCE REFERRED TO IN PARAGRAPH 4 s8 OF ARTICLE I 

Australia October 15, 1946. 

Canada July 1, 1939. 

France January 1, 1939. 

Lebano-Syrian Customs Union November 30, 1938. 

Union of South Africa July 1, 1938. 

Southern Rhodesia May 1, 1941. 



ANNEX H— PERCENTAGE SHARES OF TOTAL EXTERNAL TRADE TO BE 
USED FOR THE PURPOSE OF MAKING THE DETERMINATION RE- 
FERRED TO IN ARTICLE XXVI M 

(Based on the average of 1949-1953) 

If, prior to the accession of the Government to Japan to the General 
Agreement, the present Agreement has been accepted by contracting 
parties the external trade of which under column I accounts for 
the percentage of such trade specified in paragraph 6 of Article XXVI, 
column I shall be applicable for the purposes of that paragraph. If 
the present Agreement has not been so accepted prior to the accession 
of the Government of Japan, column II shall be applicable for the 
purposes of that paragraph. 

38 As amended and restated by Part AA of the Protocol Amending the Preamble and 
Parts IT and III of the G.A.T.T. (8 UST 1794). The number "4" has been substituted for 
the number "3" in the heading of Annex G. The reference to Article I was intended to be 
a reference to the last paragraph of Article I, which originally consisted of only three 
numbered paragraphs. 






239 





Contracting parties on 






Contracting parties on 






Mar. 


1, 1955 
(1) 


Mar. 1, 1955 

and Japan 

(2) 


Mar. 1, 1955 
(1) 


Mar. 1 
and 


,1955 

Japan 

(2) 


Australia 

Austria 

Belgium-Luxemburg 

Brazil 

Burma 




3.1 

.9 

4.3 

2.5 

.3 

6.7 

.5 

.6 

1.1 

1.4 

1.4 

.1 

1.0 

8.7 

5.3 
.4 
.1 

2.4 




3.0 

.8 

4.2 

2.4 

.3 

6.5 

.5 

.6 

1.1 

1.4 

1.4 

.1 

1.0 

8.5 

5.2 
.4 
.1 

2.4 


Indonesia 

Italy 

Netherlands, Kingdom of 

the.. 

New Zealand 


1.3 
2.9 

4.7 

1.0 
.1 

1.1 
.9 
.4 
.6 

2.5 
.6 

1.8 

20.3 

20.6 

.4 




1.3 
2.8 

4.6 
1 


Canada 

Ceylon 

Chile 


Nicaragua 

Norway 

Pakistan 


.1 
1.1 
.8 


Cuba 

Czechoslovakia 

Denmark 

Dominican Republic 

Finland 

France. 

Germany, Federal 

Republic of 

Greece 

Haiti 

India 


Peru 

Rhodesia and Nyasaland... 

Sweden.. 

Turkey 

Union of South Africa 

United Kingdom 

United States of America.. 

Uruguay 

Japan 

Total 


.4 

.6 

2.4 

.6 

1.8 

19.8 

20.1 

.4 

2.3 


100.0 




100.0 



Note: These percentages have been computed taking into account the trade of all territories in respect of which the 
General Agreement on Tariffs and Trade is applied. 



ANNEX I— NOTES AND SUPPLEMENTARY PROVISIONS 39 

Ad Article I 
Paragraph 1. 

The obligations incorporated in paragraph 1 of Article I by refer- 
ence to paragraphs 2 and 4 of Article III and those incorporated in 
paragraph 2(b) of Article II by reference to Article VI shall be con- 
sidered as falling within Part II for the purposes of the Protocol of 
Provisional Application. 

The cross-references, in the paragraph immediately above and in 
paragraph 1 of Article I, to paragraphs 2 and 4 of Article III shall 
only apply after Article III has been modified by the entry into force 
of the amendment provided for in the Protocol Modifying Part II 
and Article XXVI of the General Agreement on Tariffs and Trade, 
dated September 14, 1948. 

Paragraph 4. 

The term "margin of preference" means the absolute difference be- 
tween the most- favoured-nation rate of duty and the preferential rate 
of duty for the like product, and not the proportionate relation be- 
tween those rates. As examples : 

( 1) If the most-favoured-nation rate were 36 per cent ad valorem 
and the preferential rate were 24 per cent ad valorem, the margin 
of preference would be 12 per cent ad valorem, and not one-third 
of the most-favoured-nation rate; 

(2) If the most- favoured-nation rate were 36 per cent ad 
valorem and the preferential rate were expressed as two- thirds of 
the most-favoured-nation rate, the margin of preference would 
be 12 per cent ad valorem; 

(3) If the most-favoured-nation rate were 2 francs per kilo- 
gramme and the preferential rate were 1.50 francs per kilo- 
gramme, the margin of preference would be 0.50 francs per kilo- 
gramme. 

39 As amended to Indicate additions and alterations. 



240 

The following kinds of customs action, taken in accordance with 
established uniform procedures, would not be contrary to a general 
binding of margins of preference: 

(i) The re-application to an imported product of a tariff classi- 
fication or rate of duty, properly applicable to such product, in 
cases in which the application of such classification or rate to 
such product was temporarily suspended or inoperative on April 
10, 1947; and 

(ii) The classification of a particular product under a tariff 
item other than that under which importations of that product 
were classified on April 10, 1947, in cases in which the tariff law 
clearly contemplates that such product may be classified under 
more than one tariff item. 

Ad Article II 
Paragraph 2(a). 

The cross-reference, in paragraph 2(a) of Article II, to paragraph 
2 of Article III shall only apply after Article III has been modified 
by the entry into force of the amendment provided for in the Protocol 
Modifying Part II and Article XXVI of the General Agreement on 
Tariffs and Trade, dated September 14, 1948. 

Paragraph 2(b). 

See the note relating to paragraph 1 of Article I. 
Paragraph 4. 

Except where otherwise specifically agreed between the contracting 
parties which initially negotiated the concession, the provisions of 
this paragraph will be applied in the light of the provisions of Article 
31 of the Havana Charter. 

Ad Article III 

Any internal tax or other internal charge, or any law, regulation or 
requirement of the kind referred to in paragraph 1 which applies to 
an imported product and to the like domestic product and is collected 
or enforced in the case of the imported product at the time or point of 
importation, is nevertheless to be regarded as an internal tax or other 
internal charge, or a law, regulation or requirement of the kind re- 
ferred to in paragraph 1, and is accordingly subject to the provisions of 
Article III. 

Paragraph 1. 

The application of paragraph 1 to internal taxes imposed by local 
governments and authorities within the territory of a contracting 
party is subject to the provisions of the final paragraph of Article 
XXIV. The term "reasonable measures" in the last-mentioned para- 
graph would not require, for example, the repeal of existing national 
legislation authorizing local governments to impose internal taxes 
which, although technically inconsistent with the letter of Article III, 
are not in fact inconsistent with its spirit, if such repeal would result 
in a serious financial hardship for the local governments or authorities 
concerned. With regard to taxation by local governments or authori- 
ties which is inconsistent with both ihe letter and spirit of Article 
III, the term "reasonable measures" would permit a contracting party 
to eliminate the inconsistent taxation gradually over a transition pe- 



241 

riod, if abrupt action would create serious administrative and financial 
difficulties. 

Paragraph 2. 

A tax conforming to the requirements of the first sentence of para- 
graph 2 would be considered to be inconsistent with the provisions of 
the second sentence only in cases where competition was involved 
between, on the one hand, the taxed product and, on the other hand, a 
directly competitive or substitutable product which was not similarly 
taxed. 

Paragraph 5. 

Regulations consistent with the provisions of the first sentence of 
paragraph 5 shall not be considered to be contrary to the provisions of 
the second sentence in any case in which all of the products subject to 
the regulations are produced domestically in substantial quantities. A 
regulation cannot be justified as being consistent with the provisions of 
the second sentence on the ground that the proportion or amount allo- 
cated to each of the products which are the subject of the regulation 
constitutes an equitable relationship between imported and domestic 
products. 

Ad Article V 
Paragraph 5. 

With regard to transportation charges, the principle laid down in 
paragraph 5 refers to like products being transported on the same 
route under like conditions. 

Ad Article VI 
Paragraph 1. 

1. Hidden dumping by associated houses (that is, the sale by an 
importer at a price below that corresponding to the price invoiced by 
an exporter with whom the importer is associated, and also below 
the price in the exporting country) constitutes a form of price dump- 
ing with respect to which the margin of dumping may be calculated 
on the basis of the price at which the goods are resold by the importer. 

2. It is recognized that, in the case of imports from a country which 
has a complete or substantially complete monopoly of its trade and 
where all domestic prices are fixed by the State, special difficulties may 
exist in determining price comparability for the purposes of paragraph 
1, and in such cases importing contracting parties may find it neces- 
sary to take into account the possibility that a strict comparison with 
domestic prices in such a country may not always be appropriate. 

Paragraphs 2 and 3. 

Note 1. — As in many other cases in customs administration, a con- 
tracting party may require reasonable security (bond or cash deposit) 
for the payment of anti-dumping or countervailing duty pending final 
determination of the facts in any case of suspected dumping or sub- 
sidization. 

Note 2. — Multiple currency practices can in certain circumstances 
constitute a subsidy to exports which may be met by countervailing 
duties under paragraph 3 or can constitute a form of dumping by 
means of a partial depreciation of a country's currency which may be 



242 

met by action under paragraph. 2. By "multiple currency practices" 
is meant practices by governments or sanctioned by governments. 

Paragraph 6(b). 

Waivers under the provisions of this sub-paragraph shall be granted 
only on application by the contracting party proposing to levy an 
anti-dumping or countervailing duty, as the case may be. 

Ad Article VII 
Paragraph 1. 

The expression "or other charges" is not to be regarded as including 
internal taxes or equivalent charges imposed on or in connexion with 
imported products. 

Paragraph 2. 

1. It would be in conformity with Article VII to presume that 
"actual value" may be represented by the invoice price, plus any non- 
included charges for legitimate costs which are proper elements of 
"actual value" and plus any abnormal discount or other reduction from 
the ordinary competitive price. 

2. It would be in conformity with Article VII, paragraph 2(b), for 
a contracting party to construe the phrase "in the ordinary course of 
trade . . . under fully competitive conditions", as excluding any trans- 
action wherein the buyer and seller are not independent of each other 
and price is not the sole consideration. 

3. The standard of "fully competitive conditions" permits a contract- 
ing party to exclude from consideration prices involving special dis- 
counts limited to exclusive agents. 

4. The wording of sub-paragraphs (a) and (b) permits a contract- 
ing party to determine the value for customs purposes, uniformly 
either (1) on the basis of a particular exporter's prices of the imported 
merchandise, or (2) on the basis of the general price level of like 
merchandise. 

Ad Article VIII 

1. While Article VIII does not cover the use of multiple rates of 
exchange as such, paragraphs 1 and 4 condemn the use of exchange 
taxes or fees as a device for implementing multiple currency practices; 
if, however, a contracting party is using multiple currency exchange 
fees for balance of payments reasons with the approval of the Inter- 
national Monetary Fund, the provisions of paragraph 9(a) of Article 
XV fully safeguard its position. 

2. It would be consistent with paragraph 1 if on the importation of 
products from the territory of a contracting party into the territory of 
another contracting party, the production of certificates of origin 
should only be required to the extent that is strictly indispensable. 

Ad Articles XI, XII, XIII, XIV and XVIII 

Throughout Articles XI, XII, XIII. XIV and XVIII the terms 
"import restrictions" or "export restrictions" include restrictions made 
effective through state-trading operations. 






243 

Ad Article XI 
Paragraph 2($). 

The term "in any form" in this paragraph covers the same products 
when in an early stage of processing and still perishable, which com- 
pete directly with the fresh product and if freely imported would tend 
to make the restriction on the fresh product ineffective. 

Paragraph 2, last sub-paragraph. 

The term "special factors" includes changes in relative productive 
efficiency as between domestic and foreign producers, or as between 
different foreign producers, but not changes artificially brought about 
by means not permitted under the Agreement. 

Ad Article XII 

The contracting parties shall make provision for the utmost secrecy 
in the conduct of any consultation under the provisions of this Article. 

Paragraph 3(c) (i). 

Contracting parties applying restrictions shall endeavour to avoid 
causing serious prejudice to exports of a commodity on which the 
economy of a contracting party is largely dependent. 

Paragraph 4(b). 

It is agreed that the date shall be within ninety days after the entry 
into force of the amendments of this Article effected by the Protocol 
Amending the Preamble and Parts II and III of this Agreement. 
However, should the contracting parties find that conditions were 
not suitable for the application of the provisions of this sub-paragraph 
at the time envisaged, they may determine a later date; Provided 
that such date is not more than thirty days after such time as the 
obligations of Article VIII, Sections 2, 3, and 4 of the Articles of 
Agreement of the International Monetary Fund become applicable 
to contracting parties, members of the Fund, the combined foreign 
trade of which constitutes at least fifty per centum of the aggregate 
foreign trade of all contracting parties. 

Paragraph 4(c). 

It is agreed that paragraph 4(e) does not add any new criteria for 
the imposition or maintenance of quantitative restrictions for balance 
of payments reasons. It is solely intended to ensure that all external 
factors such as changes in the terms of trade, quantitative restrictions, 
excessive tariffs and subsidies, which may be contributing to the bal- 
ance of payments difficulties of the contracting party applying restric- 
tions will be fully taken into account. 

Ad Article XIII 
Paragraph 2(d). 

No mention was made of "commercial considerations" as a rule for 
the allocation of quotas because it was considered that its application 
oy governmental authorities might not always be practicable. More- 
over, in cases where it is practicable, a contracting party could apply 



244 

these considerations in the process of seeking agreement, consistently 
with the general rule laid down in the opening sentence of paragraph 2. 

Paragraph 4. 

See note relating to "special factors" in connection with the last sub- 
paragraph of paragraph 2 of Article XI. 

Ad Article XIV 
Paragraph 1. 

The provisions of this paragraph shall not be so construed as to 
preclude full consideration by the contracting parties, in the consulta- 
tions provided for in paragraph 4 of Article XII and in paragraph 12 
of Article XVIII, of the nature, effects and reasons for discrimination 
in the field of import restrictions. 40 

Paragraph 2. 

One of the situations contemplated in paragraph 2 is that of a con- 
tracting party holding balances acquired as a result of current trans- 
actions which it finds itself unable to use without a measure of 
discrimination. 

Ad Article XV 
Paragraph 4. 

The word "frustrate" is intended to indicate, for example, that in- 
fringements of the letter of any Article of this Agreement by exchange 
action shall not be regarded as a violation of that Article if, in prac- 
tice, there is no appreciable departure from the intent of the Article. 
Thus, a contracting party which, as part of its exchange control op- 
erated in accordance with the Articles of Agreement of the Interna- 
tional Monetary Fund, requires payment to be received for its exports 
in its own currency or in the currency of one or more members of the 
International Monetary Fund will not thereby be deemed to contra- 
vene Article XI or Article XIII. Another example would be that of 
a contracting party which specifies on an import license the country 
from which the goods may be imported, for the purpose not of intro- 
ducing any additional element of discrimination in its import licensing 
system but of enforcing permissible exchange controls. 

Ad Article XVI 

The exemption of an exported product from duties or taxes borne 
by the like product when destined for domestic consumption, or the 
remission of such duties or taxes in amounts not in excess of those 
which have accrued, shall not be deemed to be a subsidy. 

Section B 

1. Nothing in Section B shall preclude the use by a contracting 
party of multiple rates of exchange in accordance with the Articles of 
Agreement of the International Monetary Fund. 

2. For the purposes of Section B, a "primary product" is under- 
stood to be any product of farm, forest or fishery, or any mineral, in 
its natural form or which has undergone such processing as is custom- 

40 Text as amended Feb. 15, 1961. 



245 

arily required to prepare it for marketing in substantial volume in in- 
ternational trade. 

Paragraph 3 . 

1. The fact that a contracting party has not exported the product 
in question during the previous representative period would not in it- 
self preclude that contracting party from establishing its right to ob- 
tain a share of the trade in the product concerned. 

2. A system for the stabilization of the domestic price or of the re- 
turn to domestic producers of a primary product independently of the 
movements of export prices, which results at times in the sale of the 
product for export at a price lower than the comparable price charged 
for the like product to buyers in the domestic market, shall be con- 
sidered not to involve a subsidy on exports within the meaning of 
paragraph 3 if the contracting parties determine that: 

(a) the system has also resulted, or is so designed as to result, 
in the sale of the product for export at a price higher than the 
comparable price charged for the like product to buyers in the 
domestic market; and 

(b) the system is so operated, or is designed so to operate, either 
because of the effective regulation of production or otherwise, as 
not to stimulate exports unduly or otherwise seriously to prejudice 
the interests of other contracting parties. 

Notwithstanding such determination by the contracting parties, 
operations under such a system shall be subject to the provisions of 
paragraph 3 where they are wholly or partly financed out of govern- 
ment funds in addition to the funds collected from producers in respect 
of the product concerned. 

Paragraph 4. 

The intention of paragraph 4 is that the contracting parties should 
seek before the end of 1957 to reach agreement to abolish all remaining 
subsidies as from 1 January 1958; or, failing this, to reach agreement 
to extend the application of the standstill until the earliest date there- 
after by which they can expect to reach such agreement. 

Ad Article XVII 
Paragraph 1. 

The operations of Marketing Boards, which are established by con- 
tracting parties and are engaged in purchasing or selling, are subject 
to the provisions of sub-paragraphs (a) and (b) . 

The activities of Marketing Boards which are established by con- 
tracting parties and which do not purchase or sell but lay down regu- 
lations covering private trade are governed by the relevant Articles of 
this Agreement. 

The charging by a state enterprise of different prices for its sales of 
a product in different markets is not precluded by the provisions of 
this Article, provided that such different prices are charged for com- 
mercial reasons, to meet conditions of supply and demand in export 
markets. 

Paragraph 1(a). 

Governmental measures imposed to ensure standards of quality and 
efficiency in the operation of external trade, or privileges granted for 



246 

the exploitation of national natural resources but which do not em- 
power the government to exercise control over the trading activities 
of the enterprise in question, do not constitute "exclusive or special 
privileges". 

Paragraph 1(b). 

A country receiving a "tied loan" is free to take this loan into 
account as a "commercial consideration" when purchasing require- 
ments abroad. 

Paragraph 2. 

The term "goods" is limited to products as understood in commercial 
practice, and is not intended to include the purchase or sale of services. 

Paragraph 3. 

Negotiations which contracting parties agree to conduct under this 
paragraph may be directed towards the reduction of duties and other 
charges on imports and exports or towards the conclusion of any other 
mutually satisfactory arrangement consistent with the provisions of 
this Agreement. (See paragraph 4 of Article II and the note to that 
paragraph.) 

Paragraph 4(b) . 

The term "import mark-up" in this paragraph shall represent the 
margin by which the price charged by the import monopoly for the 
imported product (exclusive of internal taxes within the purview of 
Article III, transportation, distribution, and other expenses incident 
to the purchase, sale or further processing, and a reasonable margin of 
profit) exceeds the landed cost. 

Ad Article XVIII 

The contracting parties and the contracting parties concerned shall 
preserve the utmost secrecy in respect of matters arising under this 
Article. 

Paragraphs 1 and 4. 

1. When they consider whether the economy of a contracting party 
"can only support low standards of living", the contracting parties 
shall take into consideration the normal position of that economy and 
shall not base their determination on exceptional circumstances such 
as those which may result from the temporary existence of exception- 
ally favourable conditions for the staple export product or products 
of such contracting party. 

2. The phrase "in the early stages of development" is not meant 
to apply only to contracting parties which have just started their 
economic development, but also to contracting parties the economies 
of which are undergoing a process of industrialization to correct an 
excessive dependence on primary production. 

Paragraphs 2, 3, 7, 13 and 22. 

The reference to the establishment of particular industries shall 
apply not only to the establishment of a new industry, but also to the 
establishment of a new branch of production in an existing industry 
and to the substantial transformation of an existing industry, and to 
the substantial expansion of an existing industry supplying a rela- 



247 

tively small proportion of the domestic demand. It shall also cover 
the reconstruction of an industry destroyed or substantially damaged 
as a result of hostilities or natural disasters. 

Paragraph 7(b). 

A modification or withdrawal, pursuant to paragraph 7(b), by a 
contracting party, other than the applicant contracting party, re- 
ferred to in paragraph 7(a), shall be made within six months of the 
day on which the action is taken by the applicant contracting party, and 
shall become effective on the thirtieth day following the day on which 
such modification or withdrawal has been notified to the contracting 
parties. 

Paragraph 11. 

The second sentence in paragraph 11 shall not be interpreted to mean 
that a contracting party is required to relax or remove restrictions if 
such relaxation or removal would thereupon produce conditions, jus- 
tifying the intensification or institution, respectively, of restrictions 
under paragraph 9 of Article XVIII. 

Paragraph 12(b). 

The date referred to in paragraph 12(b) shall be the date deter- 
mined by the contracting parties in accordance with the provisions of 
paragraph 4(b) of Article XII of this Agreement. 

Paragraphs 13 and 14. 

It is recognized that, before deciding on the introduction of a meas- 
ure and notifying the contracting parties in accordance with para- 
graph 14, a contracting party may need a reasonable period of time to 
assess the competitive position of the industry concerned. 

Paragraphs 15 and 16. 

It is understood that the contracting parties shall invite a contract- 
ing party proposing to apply a measure under Section C to consult 
with them pursuant to paragraph 16 if they are requested to do so by a 
contracting party the trade of which would be appreciably affected by 
the measure in question. 

Paragraphs 16, 18, 19 and 22. 

1. It is understood that the contracting parties may concur in a pro- 
posed measure subject to specific conditions or limitations. If the meas- 
ure as applied does not conform to the terms of the concurrence it will 
to that extent be deemed a measure in which the contracting parties 
have not concurred. In cases in which the contracting parties have con- 
curred in a measure for a specified period, the contracting party con- 
cerned, if it finds that the maintenance of the measure for a further 
period of time is required to achieve the objective for which the meas- 
ure was originally taken, may apply to the contracting parties for an 
extension of that period in accordance with the provisions and proce- 
dures of Section C or D, as the case may be. 

2. It is expected that the contracting parties will, as a rule, refrain 
from concurring in a measure which is likely to cause serious prejudice 
to exports of a commodity on which the economy of a contracting party 
is largely dependent. 



248 

Paragraphs 18 and 22. 

The phrase "that the interests of other contracting parties are ade- 
quately safeguarded" is meant to provide latitude sufficient to permit 
consideration in each case of the most appropriate method of safe- 
guarding those interests. The appropriate method may, for instance, 
take the form of an additional concession to be applied by the con- 
tracting party having recourse to Section C or D during such time 
as the deviation from the other Articles of the Agreement would re- 
main in force or of the temporary suspension by any other contracting 
party referred to in paragraph 18 of a concession substantially equiva- 
lent to the impairment due to the introduction of the measure in ques- 
tion. Such contracting party would have the right to safeguard its 
interests through such a temporary suspension of a concession ; Pro- 
vided that this right will not be exercised when, in the case of a meas- 
ure imposed by a contracting party coming within the scope of para- 
graph 4(a) , the contracting parties have determined that the extent of 
the compensatory concession proposed was adequate. 

Paragraph 19. 

The provisions of paragraph 19 are intended to cover the cases where 
an industry has been in existence beyond the "reasonable period of 
time" referred to in the note to paragraphs 13 and 14, and should not 
be so construed as to deprive a contracting party coming within the 
scope of paragraph 4(a) of Article XVIII, of its right to resort to the 
other provisions of Section C, including paragraph 17, with regard to a 
newly established industry even though it has benefited from inciden- 
tal protection afforded by balance of payments import restrictions. 

Paragraph 21. 

Any measure taken pursuant to the provisions of paragraph 21 shall 
be withdrawn forthwith if the action taken in accordance with para- 
graph 17 is withdrawn or if the contracting parties concur in the meas- 
ure proposed after the expiration of the ninety-day time limit specified 
in paragraph 17. 

Ad Article XX 
Sub-paragraph (h) 

The exception provided for in this sub-paragraph extends to any 
commodity agreement which conforms to the principles approved by 
the Economic and Social Council in its Eesolution 30 (IV) of 28 
March 1947. 

Ad Article XXIV 
Paragraph 9. 

It is understood that the provisions of Article I would require that, 
when a product which has been imported into the territory of a mem- 
ber of a customs union or free-trade area at a preferential rate of duty 
is re-exported to the territory of another member of such union or 
area, the latter member should collect a duty equal to the difference be-, 
tween the duty already paid and any higher duty that would be pay- 
able if the product were being imported directly into its territory. 
Paragraph 11. 

Measures adopted by India and Pakistan in order to carry out 
definitive trade arrangements between them, once they have been 



249 

agreed upon, might depart from particular provisions of this Agree- 
ment, but these measures would in general be consistent with the ob- 
jectives of the Agreement. 

Ad Article XXVIII 

The contracting parties and each contracting party concerned 
should arrange to conduct the negotiations and consultations with the 
greatest possible secrecy in order to avoid premature disclosure of 
details of prospective tariff changes. The contracting parties shall be 
informed immediately of all changes in national tariffs resulting from 
recourse to this Article. 

Paragraph 1. 

1. If the contracting parties specify a period other than a three- 
year period, a contracting party may act pursuant to paragraph 1 
or paragraph 3 of Article XXVIII on the first day following the ex- 
piration of such other period and, unless the contracting parties have 
again specified another period, subsequent periods will be three-year 
periods following the expiration of such specified period. 

2. The provision that on 1 January 1958, and on other days deter- 
mined pursuant to paragraph 1, a contracting party "may . . . mod- 
ify or withdraw a concession" means that on such day, and on the 
first day after the end of each period, the legal obligation of such 
contracting party under Article II is altered; it does not mean that 
the changes in its customs tariff should necessarily be made effective 
on that day. If a tariff change resulting from negotiations undertaken 
pursuant to this Article is delayed, the entry into force of any com- 
pensatory concessions may be similarly delayed. 

3. Xot earlier than six months, nor later than three months, prior 
to 1 January 1958, or to the termination date of any subsequent period, 
a contracting party wishing to modify or withdraw any concession 
embodied in the appropriate Schedule, should notify the contracting 
parties to this effect. The contracting parties shall then determine the 
contracting party or contracting parties with which the negotiations 
or consultations referred to in paragraph 1 shall take place. Any con- 
tracting party so determined shall participate in such negotiations or 
consultations with the applicant contracting party with the aim of 
reaching agreement before the end of the period. Any extension of 
the assured life of the Schedules shall relate to the Schedules as modi- 
fied after such negotiations, in accordance with paragraphs 1, 2, and 3 
of Article XXVIII. If the contracting parties are arranging for mul- 
tilateral tariff negotiations to take place within the period of six 
months before 1 January 1958, or before any other day determined 
pursuant to paragraph 1, they shall include in the arrangements for 
such negotiations suitable procedures for carrying out the negotiations 
referred to in this paragraph. 

4. The object of providing for the participation in the negotiations 
of any contracting party with a principal supplying interest, in addi- 
tion to any contracting party with which the concession was initially 
negotiated, is to ensure that a contracting party with a larger share in 
trade affected by the concession than a contracting party with which 
the concession was initially negotiated shall have an effective oppor- 



250 

tunity to protect the contractual right which it enjoys under this 
Agreement. On the other hand, it is not intended that the scope of the 
negotiations should be such as to make negotiations and agreement 
under Article XXVIII unduly difficult nor to create complications in 
the application of this Article in the future to concessions which result 
from negotiations thereunder. Accordingly, the contracting parties 
should only determine that a contracting party has a principal supply- 
ing interest if that contracting party has had, over a reasonable period 
of time prior to the negotiations, a larger share in the market of the 
applicant contracting party than a contracting party with which the 
concession was initially negotiated or would, in the judgment of the 
contracting parties, have had such a share in the absence of discrimina- 
tory quantitative restrictions maintained by the applicant contracting 
party. It would therefore not be appropriate for the contracting par- 
ties to determine that more than one contracting party, or in those ex- 
ceptional cases where there is near equality more than two contracting 
parties, had a principal supplying interest. 

5. Notwithstanding the definition of a principal supplying interest 
in note 4 to paragraph 1, the contracting parties may exceptionally 
determine that a contracting party has a principal supplying interest 
if the concession in question affects trade which constitutes a major 
part of the total exports of such contracting party. 

6. It is not intended that provision for participation in the negotia- 
tions of any contracting party with a principal supplying interest, and 
for consultation with any contracting party having a substantial in- 
terest in the concession which the applicant contracting party is seek- 
ing to modify or withdraw, should have the effect that it should have 
to pay compensation or suffer retaliation greater than the withdrawal 
or modification sought, judged in the light of the conditions of trade 
at the time of the proposed withdrawal or modification, making allow- 
ance for any discriminatory quantitative restrictions maintained by 
the applicant contracting party. 

7. The expression "substantial interest" is not capable of a precise 
definition and accordingly may present difficulties for the contracting 
parties. It is, however, intended to be construed to cover only those 
contracting parties which have, or in the absence of discriminatory 
quantitative restrictions affecting their exports could reasonably bie 
expected to have, a significant share in the market of the contracting 
party seeking to modify or withdraw the concession. 

Paragraph 4. 

1. Any request for authorization to enter into negotiations shall 
be accompanied by all relevant statistical and other data. A decision 
on such request shall be made within thirty days of its submission. 

2. It is recognized that to permit certain contracting parties, de- 
pending in large measure on a relatively small number of primary 
commodities and relying on the tariff as an important aid for further- 
ing diversification of their economies or as an important source of 
revenue, normally to negotiate for the modification or withdrawal of 
concessions only under paragraph 1 of Article XXVIIT, might cause 
them at such a time to make modifications or withdrawals which in 
the long run would prove unnecessary. To avoid such a situation the 
contracting parties shall authorize any such contracting party, under 



251 

paragraph 4, to enter into negotiations unless they consider this would 
result in, or contribute substantially towards, such an increase in tariff 
levels as to threaten the stability of the Schedules to this Agreement 
or lead to undue disturbance of international trade. 

3. It is expected that negotiations authorized under paragraph 4 
for modification or withdrawal of a single item, or a very small group 
of items, could normally be brought to a conclusion in sixty days. It 
is recognized, however, that such a period will be inadequate for cases 
involving negotiations for the modification or withdrawal of a larger 
number of items and in such cases, therefore, it would be appropriate 
for the contracting parties to prescribe a longer period. 

4. The determination referred to in paragraph 4(d) shall be made 
by the contracting parties within thirty days of the submission of the 
matter to them, unless the applicant contracting party agrees to a 
longer period. 

5. In determining under paragraph 4(d) whether an applicant con- 
tracting party has unreasonably failed to offer adequate compensation. 
it is understood that the contracting parties will take due account of 
the special position of a contracting party which has bound a high pro- 
portion of its tariffs at very low rates of duty and to this extent has less 
scope than other contracting parties to make compensatory adjustment. 

Ad Article XXVIII bis 
Paragraph 3. 

It is understood that the reference to fiscal needs would include the 
revenue aspect of duties and particularly duties imposed primarily for 
revenue purposes or duties imposed on products which can be sub- 
stituted for products subject to revenue duties to prevent the avoidance 
of such duties. 

Ad Article XXIX 
Paragraph 1. 

Chapters VII and VIII of the Havana Charter have been excluded 
from paragraph 1 because they generally deal with the organization, 
functions and procedures of the International Trade Organization. 

Ad Part IV 

The words "developed contracting parties" and the words "less- 
developed contracting parties" as used in Part IV are to be under- 
stood to refer to developed and less-developed countries which are 
parties to the General Agreement on Tariffs and Trade. 

Ad Article XXXVI 
Paragraph 1 

This Article is based upon the objectives set forth in Article I as it 
will be amended by Section A of paragraph 1 of the Protocol Amend- 
ing Part I and Articles XXIX and XXX when that Protocol enters 
into force. 

Paragraph If 

The term "primary products" includes agricultural products, vide 
paragraph 2 of the note Ad Article XVI, Section R 



252 

Paragraph 5 

A diversification programme would generally include the intensifi- 
cation of activities for the processing of primary products and the 
development of manufacturing industries, taking into account the sit- 
uation of the particular contracting party and the world outlook for 
production and consumption of different commodities. 

Paragraph 8 

It is understood that the phrase "do not expect reciprocity" means, in 
accordance with the objectives set forth in this Article, that the less- 
developed contracting parties should not be expected, in the course of 
trade negotiations, to make contributions which are inconsistent with 
their individual development, financial and trade needs, taking into 
consideration past trade developments. 

This paragraph would apply in the event of action under Section A 
of Article XVIII, Article XXVIII, Article XXVIII bis (Article 
XXIX after the amendment set forth in Section A of paragraph 1 
of the Protocol Amending Part I and Articles XXIX and XXX 
shall have become effective) , Article XXXIII, or any other procedure 
under this Agreement. 

Ad Article XXXVII 
Paragraph 1(a) 

This paragraph would apply in the event of negotiations for reduc- 
tion or elimination of tariffs or other restrictive regulations of com- 
merce under Articles XXVIII, XXVIII bis (XXIX after the amend- 
ment set forth in Section A of paragraph 1 of the Protocol Amending 
Part I and Articles XXIX and XXX shall have become effective), 
and Article XXXIII, as well as in connexion with other action to 
effect such reduction or elimination which contracting parties may 
be able to undertake. 

Paragraph 3(b) 

The other measures referred to in this paragraph might include 
steps to promote domestic structural changes, to encourage the con- 
sumption of particular products, or to introduce measures of trade 
promotion. 



PROTOCOL OF PROVISIONAL APPLICATION OF THE GENERAL 
AGREEMENT ON TARIFFS AND TRADE 41 

1. The Governments of the COMMONWEALTH of AUSTRALIA, 
the KINGDOM OF BELGIUM (in respect of its metropolitan terri- 
tory), CANADA, the FRENCH REPUBLIC (in respect of its 
metropolitan territory), CANADA, the FRENCH REPUBLIC (in 
respect of its metropolitan territory), the GRAND-DUCHY OF- 
LUXEMBURG, the KINGDOM OF THE NETHERLANDS (in 
respect of its metropolitan territory), the UNITED KINGDOM OF 
GREAT BRITAIN AND NORTHERN IRELAND (in respect of 
its metropolitan territory), and the UNITED STATES OF AMER- 
ICA, undertake, provided that this Protocol shall have been signed 



41 61 Stat, part (6), page A2051. 



253 

on behalf of all the foregoing Governments not later than November 
15. 1947. to apply provisionally on and after January 1, 1948 : ^ 

(a) Parts I and III of the General Agreement on Tariffs and 
Trade, and 

(b) Part II of that Agreement to the fullest extent not incon- 
sistent with existing legislation. 

2. The foregoing Governments shall make effective such provisional 
application of the General Agreement, in respect of any of their terri- 
tories other than their metropolitan territories, on or after January 1, 
1948, upon the expiration of thirty days from the day on which notice 
of such application is received by the Secretary-General of the United 
Nations. 

3. Any other Government signatory to this Protocol shall make 
effective such provisional application of the General Agreement, on 
or after January 1, 1948, upon the expiration of thirty days from the 
day of signature of this Protocol on behalf of such Government. 

4. This Protocol shall remain open for signature at the Headquar- 
ters of the United Nations, (a) until November 15, 1947, on behalf 
of any Government named in paragraph 1 of this Protocol which has 
not signed it on this day, and (b) until June 30, 1948, on behalf of 
any other Government signatory to the Final Act adopted at the con- 
clusion of the Second Session of the Preparatory Committee of the 
United Nations Conference on Trade and Employment which has not 
signed it on this day. 

5. Any Government applying this Protocol shall be free to with- 
draw such application, and such withdrawal shall take effect upon 
the expiration of sixty days from the day on which written notice 
of such withdrawal is received by the Secretary-General of the United 
Nations. 

6. The original of this Protocol shall be deposited with the Secre- 
tary-General of the United Nations, who will furnish certified copies 
thereof to all interested Governments. 

IN WITNESS WHEREOF the respective Representatives, after 
having communicated their full powers, found to be in good and due 
form, have signed this Protocol. 

DONE at Geneva, in a single copy, in the English and French lan- 
guages, both texts authentic, this thirtieth day of October, one thou- 
sand nine hundred and forty-seven. 



b. International Antidumping Code 1 

Agreement on Implementation of Article VI of the General Agreement on 
Tariffs and Trade; Done at Geneva, June 30, 1967; entered into force for 
the United States, July 1, 1968 

The parties to this Agreement, 

Considering, That Ministers on 21 May 1963 agreed that a significant 
liberalization of world trade was desirable and that the comprehen- 
sive trade negotiations, the 1964 Trade Negotiations, should deal not 
only with tariffs but also with non-tariff barriers ; 

Recognizing, That anti-dumping practices should not constitute an 
unjustifiable impediment to international trade and that anti-dumping 
duties may be applied against dumping only if such dumping causes 
or threatens material injury to an established industry or materially 
retards the establishment of an industry ; 

Considering, That it is desirable to provide for equitable and open 
procedures as the basis for a full examination of dumping cases ; and 

Desiring, To interpret the provisions of Article VI of the General 
Agreement and to elaborate rules for their application in order to pro- 
vide greater uniformity and certainty in their implementation : 

Hereby agree, As follows: 

Part I — Anti-Dumping Code 
Article 1 

The imposition of an anti-dumping duty is a measure to be taken 
only under the circumstances provided for in Article VI of the Gen- 
eral Agreement. The following provisions govern the application of 
this Article, in so far as action is taken under anti-dumping legisla- 
tion or regulations. 

A. DETERMINATION OF DUMPING 

Article 2 

(a) For the purpose of this Code a product is to be considered as 
being dumped, i.e. introduced into the commerce of another country at 
less than its normal value, if the export price of the product exported 
from one country to another is less than the comparable price, in the 
ordinary course of trade, for the like product when destined for con- 
sumption in the exporting country. 

(b) Throughout this Code the term "like product" ("produit simi- I 
laire") shall be interpreted to mean a product which is identical, i.e. 
alike in all respects to the product under consideration, or in the ab- 
sence of such a product, another product which, although not alike in 

1 19 UST 4348 ; TIAS 6431. 

(254) 



255 

all respects, has characteristics closely resembling those of the product 
under consideration. 

(c) In the case where products are not imported directly from the 
country of origin but^are exported [to the country] of importation from 
an intermediate country, the price at which the products are sold from 
the country of export to the country of importation shall normally be 
compared with the comparable price in the country of export. How- 
ever, comparison may be made with the price in the country of origin, 
if, for example, the products are merely trans-shipped through the 
country of export, or such products are not produced in the country of 
export, or there is no comparable price for them in the country of 
export. 

(d) When there are no sales of the like product in the ordinary 
course of trade in the domestic market of the exporting country or 
when, because of the particular market situation, such sales do not per- 
mit a proper comparison, the margin of dumping shall be determined 
by comparison with a comparable price of the like product when ex- 
ported to any third country which may be the highest such export 
price but should be a representative price, or with the cost of produc- 
tion in the country of origin plus a reasonable amount for administra- 
tive, selling and any other costs and for profits. As a general rule, the 
addition for profit shall not exceed the profit normally realized on sales 
of products of the same general category in the domestic market of the 
country of origin. 

(e) In cases where there is no export price or where it appears to the 
authorities 2 concerned that the export price is unreliable because of 
association or a compensatory arrangement between the exporter and 
the importer or a third party, the export price may be constructed on 
the basis of the price at which the imported products are first resold 
to an independent buyer, or if the products are not resold to an inde- 
pendent buyer, or not resold in the condition as imported, on such 
reasonable basis as the authorities may determine. 

(f) In order to effect a fair comparison between the export price 
and the domestic price in the exporting country (or the country of 
origin) or, if applicable, the price established pursuant to the provi- 
sions of Article VI:l(b) of the General Agreement, the two prices 
shall be compared at the same level of trade, normally at the ex fac- 
tory level, and in respect of sales made at as nearly as possible the 
same time. Due allowance shall be made in each case, on its merits, 
for the differences in conditions and terms of sale, for the differences 
in taxation, and for the other differences affecting price comparability. 
In the cases referred to in Article 2(e) allowance for costs, including 
duties and taxes, incurred between importation and resale, and for 
profits accruing, should also be made. 

(g) This Article is without prejudice to the second Supplementary 
Provision to paragraph 1 of Article VI in Annex I of the General 
Agreement. 

'When In this Code the term "authorities" Is used. It shall be Interpreted as meaning 
authorities at an appropriate , senior level. 



256 

B. DETERMINATION OF MATERIAL INJURY, THREAT OF MATERIAL INJURY 
AND MATERLVL RETARDATION 

Article 3 
Determination of Injury 3 

(a) A determination of injury shall be made only when the author- 
ities concerned are satisfied that the dumped imports are demonstra- 
bly the principal cause of material injury or of threat of material 
injury to a domestic industry or the principal cause of material re- 
tardation of the establishment of such an industry. In reaching their 
decision the authorities shall weigh, on one hand, the effect of the 
dumping and, on the other hand, all other factors taken together 
which may be adversely affecting the industry. The determination 
shall in all cases be based on positive findings and not on mere allega- 
tions or hypothetical possibilities. In the case of retarding the estab- 
lishment of a new industry in the country of importation, convincing 
evidence of the forthcoming establishment of an industry must be 
shown, for example that the plans for a new industry have reached a 
fairly advanced stage, a factory is being constructed or machinery has 
been ordered. 

(b) The valuation of injury — that is the evaluation of the effects 
of the dumped imports on the industry in question — shall be based on 
examination of all factors having a bearing on the state of the indus- 
try in question, such as: development and prospects with regard to 
turnover, market share, profits, prices (including the extent to which 
the delivered, duty-paid price is lower or higher than the comparable 
price for the like product prevailing in the course of normal commer- 
cial transactions in the importing country), export performance, 
employment, volume of dumped and other imports, utilization of ca- 
pacity of domestic industry, and productivity; and restrictive trade 
practices. No one or several of these factors can necessarily give de- 
cisive guidance. 

(c) In order to establish whether dumped imports have caused in- 
jury, all other factors which, individually or in combination, may be 
adversely affecting the industry shall be examined, for example : the 
volume and prices of undumped imports of the product in question, 
competition between the domestic producers themselves, contraction in 
demand due to substitution of other products or to changes in con- 
sumer tastes. 

(d) The effect of the dumped imports shall be assessed in relation 
to the domestic production of the like product when available data 
permit the separate identification of production in terms of such cri- 
teria as: the production process, the producers' realizations, profits. 
When the domestic production of the like product has no separate 
identity in these terms the effect of the dumped imports shall oe as- 
sessed by the examination of the production or the narrowest group or 
range of products, which includes the like product, for which the neces- 
sary information can be provided. 

8 When In this Code the term "Injury" Is used, it shall, unless otherwise specified, be 
interpreted as covering cause of material Injury to a domestic Industry, threat of material 
Injury to a domestic industry or material retardation of the establishment of such an 
Industry. 



257 

(c) A determination of threat of material injury shall be based on 
facts and not merely on allegation, conjecture or remote possibility. 
The change in circumstances which would create a situation in which 
the dumping would cause material injury must be clearly foreseen and 
imminent. 4 

(f) With respect to cases where material injury is threatened by 
dumped imports, the application of anti-dumping measures shall be 
studied and decided with special care. 

Article 4 

Definition of Industry 

(a) In determining injury the term "domestic industry" shall be 
interpreted as referring to the domestic producers as a whole of the 
like products or to those of them whose collective output of the prod- 
ucts constitutes a major proportion of the total domestic production of 
those products except that 

(i) when producers are importers of the allegedly dumped 
product the industry may be interpreted as referring to the rest 
of the producers; 

(ii) in exceptional circumstances a country may, for the produc- 
tion in question, be divided into two or more competitive markets 
and the producers within each market regarded as a separate in- 
dustry, if, because of transport costs, all the producers within 
such a market sell all or almost all of their production of the 
product in question in that market, and none, or almost none, of 
the product in question produced elsewhere in the county is sold 
in that market or if there exist special regional marketing condi- 
tions (for example, traditional patterns of distribution or con- 
sumer tastes) which result in an equal degree of isolation of the 
producers in such a market from the rest of the industry, provided, 
however, that injury may be found in such circumstances only if 
there is injury to all or almost all of the total production of the 
product in the market as defined. 

(b) Where two or more countries have reached such a level of in- 
tegration that they have the characteristics of a single, unified market, 
the industry in the entire area of integration shall be taken to be the 
industry referred to in Article 4(a). 

(c) The provisions of Article 3(d) shall be applicable to this Article. 

C. INVESTIGATION AND ADMINISTRATION PROCEDURES 

Article 5 
Initiation and Subsequent Investigation 

(a) Investigations shall normally be initiated upon a request on 
behalf of the industry 5 affected, supported by evidence both of dump- 

kJi " 6 ^ 1 ? 1 ! 1 ^ 16, th .?, u £ h P ot an exclusive one, is that there is convincing reason to 
oeneve that there will be, in the immediate future, substantially increased importations of 
the product at dumped prices. 
6 As defined in Article 4. 



258 

ing and of injury resulting therefrom for this industry. If in special 
circumstances the authorities concerned decide to initiate an investi- 
gation, without having received such a request, they shall proceed only 
if they have evidence both on dumping and on injury resulting there- 
from. 

(b) Upon initiation of an investigation and thereafter, the evidence 
of both dumping and injury should be considered simultaneously. In 
any event the evidence of both dumping and injury shall be considered 
simultaneously in the decision whether or not to initiate an investiga- 
tion, and thereafter, during the course of the investigation, starting on 
a date not later than the earliest date on which provisional measures 
may be applied, except in the cases provided for in Article 10(d) in 
which the authorities accept the request of the exporter and the im- 
porter. 

(c) An application shall be rejected and an investigation shall be 
terminated promptly as soon as the authorities concerned are satisfied 
that there is not sufficient evidence of either dumping or of injury to 
justify proceeding with the case. There should be immediate termina- 
tion in cases where the margin of dumping or the volume of dumped 
imports, actual or potential, or the injury is negligible. 

(d) An anti-dumping proceeding shall not hinder the procedures of 
customs clearance. 

Article 6 

Evidence 

(a) The foreign suppliers and all other interested parties shall be 
given ample opportunity to present in writing all evidence that they 
consider useful in respect to the anti-dumping investigation in ques- 
tion. They shall also have the right, on justification, to present evidence 
orally. 

(b) The authorities concerned shall provide opportunities for the 
complainant and the importers and exporters known to be concerned 
and the governments of the exporting countries, to see all information 
that is relevant to the presentation of their cases, that is not confiden- 
tial as defined in paragraph (c) below, and that is used by the authori- 
ties in an anti-dumping investigation, and to prepare presentations 
on the basis of this information. 

(c) All information which is by nature confidential (for example, 
because its disclosure would be of significant competitive advantage 
to a competitor or because its disclosure would have a significantly 
adverse effect upon a person supplying the information or upon a 
person from whom he acquired the information ) or which is provided 
on a confidential basis by parties to an anti-dumping investigation 
shall be treated as strictly confidential by the authorities concerned 
who shall not reveal it, without specific permission of the party sub- 
mitting such information. 

(d) However, if the authorities concerned find that a request for 
confidentiality is not warranted and if the supplier is either unwilling 
to make the information public or to authorize its disclosure in gen- 
eralized or summary form, the authorities would be free to disregard 
such information unless it can be demonstrated to their satisfaction 
from appropriate sources that the information is correct. 



259 

(e) In order to verify information provided or to obtain further 
details the authorities may earn- out investigations in other countries 
as required, provided they obtain the agreement of the firms concerned 
and provided they notify the representatives of the government of 
the country in question and unless the latter object to the investigation. 

(f) Once the competent authorities are satisfied that there is suf- 
ficient evidence to justify initiating an anti-dumping investigation 
pursuant to Article 5 representatives of the exporting country and the 
exporters and importers known to be concerned shall be notified and a 
public notice may be published. 

(g) Throughout the anti-dumping investigation all parties shall 
have a full opportunity for the defense of their interests. To this end, 
the authorities concerned shall, on request, provide opportunities for 
all directly interested parties to meet those parties with adverse in- 
terests, so that opposing views may be presented and rebuttal argu- 
ments offered. Provision of such opportunities must take account of 
the need to preserve confidentiality and of the convenience to the par- 
ties. There shall be no obligation on any party to attend a meeting and 
failure to do so shall not be prejudicial to that party's case. 

(h) The authorities concerned shall notify representatives of the ex- 
porting country and the directly interested parties of their decisions 
regarding imposition or non- imposition of anti-dumping duties, indi- 
cating the reasons for such decisions and the criteria applied, and 
shall, unless there are special reasons against doing so, make public 
the decisions. 

(i) The provisions of this Article shall not preclude the authorities 
from reaching preliminary determinations, affirmative or negative, or 
from applying provisional measures expeditiously. In cases in which 
any interested party withholds the necessary information, a final find- 
ing, affirmative or negative, may be made on the basis of the facts 
available. 

Article 7 

Price Undertakings 

(a) Anti-dumping proceedings may be terminated without imposi- 
tion of anti-dumping duties or provisional measures upon receipt of a 
voluntary undertaking by the exporters to revise their prices so that 
the margin of dumping is eliminated or to cease to export to the area 
in question at dumped prices if the authorities concerned consider this 
practicable, e.g.. if the number of exporters or potential exporters of 
the product in question is not too great and/or if the trading practices 
are suitable. 

(b) If the exporters concerned undertake during the examination 
of a case, to revise prices or to cease to export the product in question, 
and the authorities concerned accept the undertaking, the investiga- 
tion of injury shall nevertheless be completed if the exporters so de- 
sire or the authorities concerned so decide. If a determination of no 
injury is made, the undertaking given by the exporters shall auto- 
matically lapse unless the exporters state that it shall not lapse. The 
fact that exporters do not offer to give such undertakings during the 
period of investigation, or do not accept an invitation made by the in- 



260 

vestigating authorities to do so, shall in no way be prejudicial to the 
consideration of the case. However, the authorities are of course free to 
determine that a threat of injury is more likely to be realized if the 
dumped imports continue. 

D. ANTI-DUMPING DUTIES AND PROVISIONAL MEASURES 

Article 8 
Imposition and Collection of Anti-Dumping Duties 

(a) The decision whether or not to impose an anti-dumping duty 
in cases where all requirements for the imposition have been fulfilled 
and the decision whether the amount of the anti-dumping duty to be 
imposed shall be the full margin of dumping or less, are decisions to 
be made by the authorities of the importing country or customs terri- 
tory. It is desirable that the imposition be permissive in all countries 
or customs territories parties to this Agreement, and that the duty be 
less than the margin, if such lesser duty would be adequate to remove 
the injury to the domestic industry. 

(b) "Wlien an anti-dumping duty is imposed in respect of any prod- 
uct, such anti-dumping duty shall be levied, in the appropriate 
amounts in each case, on a non-discriminatory basis on imports of such 
product from all sources found to be dumped and causing injury. The 
authorities shall name the supplier or suppliers of the product con- 
cerned. If, however, several suppliers from the same country are 
involved, and it is impracticable to name all these suppliers, the au- 
thorities may name the supplying country concerned. If several sup- 
pliers from more than one country are involved, the authorities may 
name either all the suppliers involved, or, if this is impracticable, all 
the supplying countries involved. 

(c) The amount of the anti-dumping duty must not exceed the 
margin of dumping as established under Article 2. Therefore, if sub- 
sequent to the application of the anti-dumping duty it is found that 
the duty so collected exceeds the actual dumping margin, the amount 
in excess of the margin shall be reimbursed as quickly as possible. 

(d) Within a basic price system the following rules shall apply pro- 
vided that their application is consistent with the other provisions of 
this Code : 

If several suppliers from one or more countries are involved, 
anti-dumping duties may be imposed on imports of the product 
in question found to have been dumped and to be causing injury 
from the country or countries concerned, the duty being equiva- 
lent to the amount by which the export price is less than the basic 
price established for this purpose, not exceeding the lowest normal 
price in the supplying country or countries where normal condi- 
tions of competition are prevailing. It is understood that for 
products which are sold below this already established basic price 
a new anti-dumping investigation shall be carried out in each 
particular case, when so demanded by the interested parties and 
the demand is supported by relevant evidence. In cases where no 
dumping is found, anti-dumping duties collected shall bo roim- 



261 

bursed as quickly as possible. Furthermore, if it can be found 
that the duty so collected exceeds the actual dumping margin, 
the amount in excess of the margin shall be reimbursed as quickly 
as possible, 
(e) When the industry has been interpreted as referring to the pro- 
ducers in a certain area, i.e., a market as defined in Article 4(a) (iij, 
anti-dumping duties shall only be definitively collected on the prod- 
ucts in question consigned for final consumption to that area, except 
in cases where the exporter shall, prior to the imposition of anti- 
dumping duties, be given an opportunity to cease dumping in the area 
concerned. In such cases, if an adequate assurance to this effect is 
promptly given, anti-dumping duties shall not be imposed, provided, 
however, that if the assurance is not given or is not fulfilled, the duties 
may be imposed without limitation to an area. 

Article 9 
Duration of Anti-Dumping Duties 

(a) An anti-dumping duty shall remain in force only as long as it is 
necessary in order to counteract dumping which is causing injury. 

(b) The authorities concerned shall review the need for the contin- 
ued imposition of the duty, where warranted, on their own initiative 
or if interested suppliers or importers of the product so request and 
submit information substantiating the need for review. 

Article 10 
Provisional Measures 

(a) Provisional measures may be taken only when a preliminary 
decision has been taken that there is dumping and when there is suffi- 
cient evidence of injury. 

(b) Provisional measures may take the form of a provisional duty 
or, preferably, a security — by deposit or bond — equal to the amount of 
the anti-dumping duty provisionally estimated, being not greater than 
the provisionally estimated margin of dumping. Withholding of ap- 
praisement is an appropriate provisional measure provided that the 
normal duty and the estimated amount of the anti-dumping duty be 
indicated and as long as the withholding of appraisement is subject to 
the same conditions as other provisional measures. 

(c) The authorities concerned shall inform representatives of the ex- 
porting country and the directly interested parties of their decisions 
regarding imposition of provisional measures indicating the reasons 
for such decisions and the criteria applied, and shall, unless there are 
special reasons against doing so, make public such decisions. 

(d) The imposition of provisional measures shall be limited to as 
short a period as possible. More specifically, provisional measures shall 
not be imposed for a period longer than three months or, on decision 
of the authorities concerned upon request by the exporter and the 
importer, six months. 

(e) The relevant provisions of Article 8 shall be followed in the ap- 
plication of provisional measures. 



262 

Article 11 

Retroactivity 

Anti-dumping duties and provisional measures shall only be applied 
to products which enter for consumption after the time when the de- 
cision taken under Articles 8(a) and 10(a), respectively, enters into 
force, except that in cases : 

(i) Where a determination of material injury (but not of a 
threat of material injury, or of a material retardation of the es- 
tablishment of an industry) is made or where the provisional 
measures consist of provisional duties and the dumped imports 
carried out during the period of their application would, in the 
absence of these provisional measures, have caused material in- 
jury, anti-dumping duties may be levied retroactively for the pe- 
riod for which provisional measures, if any, have been applied. 

If the anti-dumping duty fixed in the final decision is higher 
than the provisionally paid duty, the difference shall not be col- 
lected. If the duty fixed in the final decision is lower than the pro- 
visionally paid duty or the amount estimated for the purpose of 
the security, the difference shall be reimbursed or the duty re- 
calculated, as the case may be. 

(ii) Where appraisement is suspended for the product in ques- 
tion for reasons which arose before the initiation of the dumping 
case and which are unrelated to the question of dumping, retro- 
active assessment of anti-dumping duties may extend back to a 
period not more than 120 days before the submission of the com- 
plaint. 

(iii) Where for the dumped product in question the authorities 
determine 

(a) either that there is a history of dumping which caused 
material injury or that the importer was, or should have been, 
aware that the exporter practices dumping and that such 
dumping would cause material injury, and 

(b) that the material injury is caused by sporadic dumping 
(massive dumped imports ot a product in a relatively short 
period) to such an extent that, m order to preclude it recur- 
ring, it appears necessary to assess an anti-dumping duty 
retroactively on those imports. 

the duty may be assessed on products which were entered for con- 
sumption not more than 90 days prior to the date of application of 
provisional measures. 

E. ANTI-DUMPING ACTION ON BEHALF OF A THIRD COUNTRY 

Article 12 

(a) An application for anti-dumping action on behalf of a third 
country shall be made by the authorities of the third country request- j 
ing action. 

(b) Such an application shall be supported by price information to 
show that the imports are being dumped and by detailed information 
to show that the alleged dumping is causing injury to the domestic 



263 

industry concerned in the third country. The government of the third 
country shall afford all assistance to the authorities of the importing 
country to obtain any further information which the latter may 
require. 

(c) The authorities of the importing country in considering such 
an application shall consider the effects of the alleged dumping on the 
industry concerned as a whole in the third country ; that is to say the 
injury shall not be assessed in relation only to the effect of the alleged 
dumping on the industry's exports to the importing country or even 
on the industry's total exports. 

(d) The decision whether or not to proceed with a case shall rest 
with the importing country. If the importing country decides that it is 
prepared to take action, the initiation of the approach to the con- 
tracting parties seeking their approval for such action shall rest with 
the importing country. 

Part II — Final Provisions 

Article 13 

This Agreement shall be open for acceptance, by signature or other- 
wise, by contracting parties to the General Agreement and by the 
European Economic Community. The Agreement shall enter into force 
on 1 July 1968 for each party which has accepted it by that date. For 
each party accepting the Agreement after that date, it shall enter into 
force upon acceptance. 

Article 14 

Each party to this Agreement shall take all necessary steps, of a 
general or particular character, to ensure, not later than the date of the 
entry into force of the Agreement for it, the conformity of its laws, 
regulations and administrative procedures with the provisions of the 
Anti-Dumping Code. 

Article 15 

Each party to this Agreement shall inform the contracting parties 
to the General Agreement of any changes in its anti-dumping laws and 
regulations and in the administration of such laws and regulations. 

Article 16 

Each party to this Agreement shall report to the contracting 
parties annually on the administration of its anti-dumping laws 
and regulations, giving summaries of the cases in which anti-dumping 
duties have been assessed definitively. 

Article 17 

The parties to this Agreement shall request the contracting 
parties to establish a Committee on Anti-Dumping Practices com- 
posed of representatives of the parties to this Agreement. The Com- 
mittee shall normally meet once each year for the purpose of affording 
parties to this Agreement the opportunity of consulting on matters 



264 

relating to the administration of anti-dumping systems in any par- 
ticipating country or customs territory as it might affect the operation 
of the Anti-Dumping Code or the furtherance of its objectives. Such 
consultations shall be without prejudice to Articles XXII and XXIII 
of the Genera] Agreement. 

This Agreement shall be deposited with the Director-General to the 
contracting parties who shall promptly furnish a certified copy thereof 
and a notification of each acceptance thereof to each contracting party 
to the General Agreement and to the European Economic Community. 

This Agreement shall be registered in accordance with the provi- 
sions of Article 102 of the Charter of the United Nations. 

DONE at Geneva this thirtieth day of June, one thousand nine hun- 
dred and sixty-seven, in a single copy, in the English and French 
languages, both texts being authentic. 



3. International Wheat Agreement 
a. Wheat Trade Convention, 1971 (amended) x 

Open for signature at Washington March 29 through May 3, 1971; Ratification 
advised by the Senate of the United States of America July 12, 1971; Ratified 
by the President of the United States of America July 24, 1971 ; Ratification of 
the United States of America deposited July 24, 1971; Proclaimed by the 
President of the United States of America July 30, 1971; Entered into force 
provisionally for the United States of America with respect to certain parts 
June 18, 1971, and with respect to the remaining parts July 1, 1971; Entered 
into force definitively for the United States of America July 24, 1971. 

INTERNATIONAL WHEAT AGREEMENT, 1971 

Preamble 

The United Nations Wheat Conference, 1971, 

Considering that the International Wheat Agreement of 1949 was 
revised, renewed or extended in 1953, 1956, 1959, 1962, 1965, 1966 and 
1967, 2 

Considering that the provisions of the International Grains Ar- 
rangement 1967, 3 consisting of the Wheat Trade Convention, on the 
one hand, and the Food Aid Convention, on the other, will expire on 30 
June 1971 and that it is desirable to conclude an Agreement for a new 
period, 

Has agreed that this International Wheat Agreement 1971 shall 
consist of two separate legal instruments 

(a) the Wheat Trade Convention 1971 and 

(b) the Food Aid Convention 1971 

and that either the Wheat Trade Convention, 1971 or both the 
Wheat Trade Convention, 1971 and the Food Aid Convention, 1971, 
as appropriate, shall be submitted for signature, ratification, accept- 
ance or approval, in conformity with their respective constitutional 
procedures, by the Governments represented at the United Nations 
Wheat Conference, 1971 and by the Governments of States party to 
the Wheat Trade Convention of the International Grains Arrange- 
ments 1967. 



*22 UST 820: TIAS 7144. For a list of states which are parties to the Convention, see 
Dept. of State publication Treaties in Force. See page 282 for the Protocol modifying and 
further extending (to June 30. 1978) the Convention. 

*TIAS 1957. 2799, 3709, 4302. 5115. 5844, 6057, 6315; 63 Stat. (2) 2173; 4 UST 944; 
7UST 3275 ; 10 UST 1477 ; 13 UST 1571 ; 16 UST 1010 ; 17 UST 948 ; 18 UST 1699. 

» TIAS 6537 ; 19 UST 5499. 

(265) 



266 

WHEAT TKADE CONVENTION, 1971 

Part I — General 

article 1 
Objectives 
The objectives of this Convention are : 

(a) To further international co-operation in connection with 
world wheat problems, recognizing the relationship of the trade 
in wheat to the economic stability of markets for other agricul- 
tural products ; 

(b) To promote the expansion of the international trade in 
wheat and wheat flour and to secure the freest possible flow of this 
trade in the interests of both exporting and importing members, 
and thus contribute to the development of countries, the economies 
of which depend on commercial sales of wheat ; 

(c) To contribute to the fullest extent possible to the stability 
of the international wheat market in the interests of both import- 
ing and exporting members ; and 

(d) To provide a framework, in conformity with Article 21 
of the present Convention, for the negotiation of provisions relat- 
ing to the prices of wheat and to the rights and obligations of 
members in respect of international trade in wheat. 

ARTICLE 2 

Definitions 

For the purposes of this Convention : 

(JL) (a) "Council" means the International Wheat Council estab- 
lished by the International Wheat Agreement 1949 and continued in 
being by Article 10 ; 

(b) "Member" means a party to this Convention or a territory or a 
group of territories in respect of which a notification has been made 
pursuant to paragraph (3) of Article 28 ; 

(c) "Exporting member" means a member listed in Annex A ; 

(d) "Importing member" means a member listed in Annex B ; 

(e) "Territory" in relation to an exporting or importing member 
includes any territory in respect of which the rights and obligations 
of that member under this Convention apply under Article 28 ; 

(f ) "Executive Committee" means the Committee established under 
Article 15 ; 

(g) "Advisory Sub-Committee on Market Conditions" means the 
Sub-Committee established under Article 16 ; 

(h) "Grains" means wheat, rye, barley, oats, maize and sorghum ; 

(i) "Wheat" includes wheat grain of any description, class, type, 
grade or quality and, except where the context otherwise requires, 
wheat flour ; 

(j) "Crop year" means the period from 1 July to 30 June; 

(k) "Bushel" means in the case of wheat sixty pounds avoirdupois 
or 27.2155 kilogrammes; 

(1) "Metric ton", or 1,000 kilogrammes, means in the case of wheat 
36.74371 bushels; 

(m) (i) "Purchase" means a purchase for import of wheat exported 
or to be exported from an exporting member or from other than an 



267 

exporting member, as the case may be, or the quantity of such wheat 
so purchased, as the context requires ; 

(ii) "Sale" means a sale for export of wheat imported or to be 
imported by an importing member or by other than an importing 
member, as the case may be, or the quantity of such wheat so sold, as 
the context requires ; 

(iii) Where reference is made in this Convention to a purchase or 
sale, it shall be understood to refer not only to purchases or sales con- 
cluded between the Governments concerned but also to purchases or 
sales concluded between private traders and to purchases or sales con- 
cluded between a private trader and the Government concerned. In 
this definition "Government" shall be deemed to include the Govern- 
ment of any territory in respect of which the rights and obligations of 
any Government ratifying, accepting, approving or acceding to this 
Convention apply under Article 28 ; 

(n) Any reference in this Convention to a "Government represented 
at the United Nations Wheat Conference, 1971" shall be construed as 
including a reference to the European Economic Community (herein- 
after referred to as the EEC). Accordingly, any reference in this Con- 
vention to "signature" or to the "deposit of instruments of ratification, 
acceptance or approval" or "an instrument of accession" or a "declara- 
tion of provisional application" by a Government shall, in the case of 
the EEC be construed as including signature or declaration of pro- 
visional application on behalf of the EEC by its competent authority 
and the deposit of the instrument required by the institutional pro- 
cedures of the EEC to be deposited for the conclusion of an inter- 
national agreement. 

(2) All calculations of the wheat equivalent of purchases of wheat 
flour shall be made on the basis of the rate of extraction indicated by. 
the contract between the buyer and the seller. If no such rate is indi- 
cated, seventy-two units by weight of wheat flour shall, for the pur- 
pose of such calculations, be deemed to be equivalent to one hundred 
units by weight of wheat grain unless the Council decides otherwise. 

ARTICLE 3 

Commercial purchases and special transactions 

(1) A commercial purchase for the purposes of this Convention is a 
purchase as defined in Article 2 which conforms to the usual com- 
mercial practices in international trade and which does not include 
those transactions referred to in paragraph (2) of this Article. 

(2) A special transaction for the purposes of this Convention is one 
which includes features introduced by the Government of a member 
concerned which do not conform to usual commercial practices. Special 
transactions include the following: 

(a) Sales on credit in which, as a result of government inter- 
vention, the interest rate, period of payment, or other related 
terms do not conform to the commercial rates, periods or terms 
prevailing in the world market ; 

(b) Sales in which the funds for the purchase of wheat are 
obtained under a loan from the Government of the exporting 
member tied to the purchase of wheat ; 



268 

(c) Sales for currency of the importing member which is not 
transferable, or convertible into currency or goods for use in the 
exporting member ; 

(d) Sales under trade agreements with special payments ar- 
rangements which include clearing accounts for settling credit 
balances bilaterally through the exchange of goods, except where 
the exporting member and the importing member concerned agree 
that the sale shall be regarded as commercial ; 

(e) Barter transactions : 

(i) which result from the intervention of governments 
where wheat is exchanged at other than prevailing world 
prices, or 

(ii) which involves sponsorship under a government pur- 
chase programme, except where the purchase of which results 
from a barter transaction in which the country of final des- 
tination was not named in the original barter contract; 

(f ) A gift of wheat or a purchase of wheat out of a monetary 
grant by the exporting member made for that specific purpose; 

(g) Any other categories of transactions, as the Council may 
prescribe, that include features introduced by the Government of 
a member concerned which do not conform to usual commercial 
practices. 

(3) Any question raised by the Executive Secretary or by any ex- 
porting or importing member as to whether a transaction is a commer- 
cial purchase as defined in paragraph (1) of this Article or a special 
transaction as defined in paragraph (2) of this Article shall be decided 
by the Council. 

ARTICLE 4 

Recording and reporting 

(1) The Council shall keep separate records for each crop year: 

(a) for the purposes of the operation of this Convention, of all 
commercial purchases by members from other members and non- 
members and of all imports by members from other members and 
non-members on terms which render them special transactions; 
and 

(b) of all commercial sales by members to non-members and 
of all exports by members to non-members on terms which render 
them special transactions. 

(2) The records referred to in the preceding paragraph shall be 
kept so that records of special transactions are separate from records 
of commercial transactions. 

(3) In order to facilitate the operation of the Advisory Sub- Com- 
mittee on Market Conditions under Article 16, the Council shall keep 
records of international market prices for wheat and wheat flour and 
of transportation costs. 

(4) In the case of any wheat which reaches the country of final des- 
tination after re-sale in, passage through, or trans-shipment from the 
ports of, a country other than that in which the wheat originated, 
members shall to the maximum extent possible make available such 
information as will enable the purchase or transaction to be entered in 
the records referred to in paragraphs (1) and (2) of this Article as a 
purchase or transaction between the country of origin and the country 



269 

of final destination. In the case of a re-sale, the provisions of this 
paragraph shall apply if the wheat originated in the country of origin 
during the same crop year. 

(5) The Council may authorize purchases to be recorded for a crop 
year if : 

(a) the loading period involved is within a reasonable time up 
to one month, to be decided by the Council, before the beginning 
or after the end of that crop year ; and 

(b) the two members concerned so agree. 

(6) For the purpose of this Article : 

(a) members shall send to the Executive Secretary such infor- 
mation concerning the quantities of wheat involved in commercial 
sales and purchases and special transactions as the Council within 
its competence may require, including : 

(i) in relation to special transactions, such detail of the 
transactions as will enable them to be classified in accordance 
with Article 3 ; 

(ii) in respect of wheat, such information as may be avail- 
able as to the type, class, grade and quality, and the quantities 
relating thereto; 

(iii) in respect of flour, such information as may be avail- 
able to identify the quality of the flour and the quantities re- 
lating to each separate quality ; 

(b) members when exporting on a regular basis, and such other 
members as the Council shall decide, shall send to the Executive 
Secretary such information relating to prices of commercial and, 
where available, special transactions in such descriptions, classes, 
types, grades and qualities of wheat and wheat flour as the Council 
may require; 

(c) the Council shall obtain regular information on currently 
prevailing transportation costs, and members shall to the extent 
practicable report such supplementary information as the Council 
may require. 

(7) The Council shall make rules of procedure for the reports and 
records referred to in this Article. Those rules shall prescribe the fre- 
quency and the manner in which those reports shall be made and shall 
prescribe the duties of members with regard thereto. The Council shall 
also make provision for the amendment of any records or statements 
kept by it, including provision for the settlement of any dispute aris- 
ing in connection therewith. If any member repeatedly and unreason- 
ably fails to make reports as required by this Article, the Executive 
Committee shall arrange consultations with that member to remedy 
the situation. 

ARTICLE 5 

Estimates of requirements and availability of wheat 

(1) By 1 October in the case of Northern Hemisphere countries and 
1 February in the case of Southern Hemisphere countries, each im- 
porting member shall notify the Council of its estimate of its com- 
mercial import requirements of wheat in that crop year. Any import- 
ing member may thereafter notify the Council of any changes it may 
desire to make in its estimate. 



270 

(2) By 1 October in the case of Northern Hemisphere countries and 
1 February in the case of Southern Hemisphere countries, each export- 
ing member shall notify the Council of its estimate of the wheat it will 
have available for export in that crop year. Any exporting member 
may thereafter notify the Council of any changes it may desire to 
make in its estimate. 

(3) All estimates notified to the Council shall be used for the pur- 
pose of the administration of this Convention and may only be made 
available to exporting and importing members on such conditions as 
the Council may prescribe. Estimates submitted in accordance with 
this Article shall in no way be binding. 

ARTICLE 

Consultations on market conditions 

(1) If the Advisory Sub-Committee on Market Conditions, in the 
course of its continuous review of the market under paragraph (2) of 
Article 16, is of the opinion that a situation of market instability has 
arisen or threatens imminently to arise, or if such a situation is called 
to the Advisory Sub-Committee's attention by the Executive Secre- 
tary on his own initiative or at the request of any exporting or import- 
ing member it shall immediately report the facts concerned to the 
Executive Committee. The Advisory Sub-Committee shall in so in- 
forming the Executive Committee give particular regard to those cir- 
cumstances which have brought about, or threaten to bring about, the 
situation of market instability, including price fluctuations. The Ex- 
ecutive Committee shall meet within five market days to review the 
situation and to consider whether it would be possible to arrive at 
mutually acceptable solutions. 

(2) The Executive Committee shall, if it considers it appropriate, 
inform the Chairman of the Council who may convene a session of the 
Council to review the situation. 

ARTICLE 7 

Disputes and complaints 

(1) Any dispute concerning the interpretation or application oi 
this Convention which is not settled by negotiation shall, at the request 
of any member which is a party to the dispute, be referred to the 
Council for decision. 

(2) Any member which considers that its interests as a party to this 
Convention have been seriously prejudiced by actions of any one or 
more members affecting the operation of this Convention may bring 
the matter before the Council. In such a case, the Council shall im- 
mediately consult with the members concerned in order to resolve the 
matter. If the matter is not resolved through such consultations, the 
Council shall consider the matter further and may make recommenda- 
tions to the members concerned. 

ARTICLE 8 

Annual review of the world loheat situation 

(1) (a) In the furtherance of the objectives of this Convention as 
set forth in Article 1, the Council shall annually review the world 



271 

wheat situation and shall inform members of the effects upon the in- 
ternational trade in wheat of the facts which emerge from the review, 
in order that these effects be kept in mind by these members in deter- 
mining and administering their internal agricultural and price policies. 

(b) The review shall be carried out in the light of information 
obtainable in relation to national production, stocks, consumption, 
prices and trade, including both commercial and special transactions 
of wheat. 

(b) Each member may submit to the Council information which is 
relevant to the annual review of the world wheat situation and is not 
already available to the Council either directly or through the appro- 
priate organization in the United Nations system including the United 
Nations Conference on Trade and Development (UNCTAD) and the 
Food and Agriculture Organization of the United Nations (FAO). 

(2) In carrying out the annual review, the Council shall consider 
the means through which the consumption of wheat may be increased, 
and may undertake, in co-operation with members, studies of such 
matters as : 

(a) factors affecting the consumption of wheat in various 
countries, and 

(b) means of achieving increased consumption, particularly in 
countries where the possibility of increased consumption is found 
to exist. 

(3) For the purposes of this Article, the Council shall take into 
account work done on grains by UNCTAD and the FAO and by other 
intergovernmental organizations, in order to avoid duplication of 
work, and may, without prejudice to the generality of paragraph (1) 
of Article 20, make such arrangements regarding co-operation in any 
of its activities as it considers desirable with such intergovernmental 
organizations and also with any Governments of Members of the 
United Nations or of the specialized agencies not party to this Con- 
vention which have a substantial interest in the international trade in 
grains. 

(4) Nothing in this Article shall prejudice the complete liberty of 
action of any member in the determination and administration of its 
internal agricultural and price policies. 

article o 

Guidelines relating to concessional transactions 

(1) Members undertake to conduct any concessional transactions in 
wheat in such a way as to avoid harmful interference with normal pat- 
terns of production and international commercial trade. 

(2) To this end members shall undertake appropriate measures to 
ensure that concessional transactions are additional to commercial 
sales which could reasonably be anticipated in the absence of such 
transactions. Such measures shall be consistent with the Principles of 
Surplus Disposal and Guiding Lines recommended by the FAO and 
may provide that a specified level of commercial imports of wheat, 
agreed with the recipient country, be maintained on a global basis by 
that country. In establishing or adjusting this level full regard shall 
be had to the commercial import levels in a representative period and 
to the economic circumstances of the recipient country, including, in 
particular, its balance-of-payments situation. 



272 

(3) Members, when engaging in concessional export transactions, 
shall consult with exporting members whose commercial sales might 
be affected by such transactions, to the maximum possible extent before 
such arrangements are concluded with recipient countries. 

(4) The Executive Committee shall furnish an annual report to the 
Council on developments in concessional transactions in wheat. 

Part II — Administration 
article 10 

Constitution of the Council 

(1) The International Wheat Council, established by the Inter- 
national Wheat Agreement 1949, shall continue in being for the pur- 
pose of administering this Convention with the membership, powers 
and functions provided in this Convention. 

(2) Each exporting and importing member shall be a voting mem- 
ber of the Council and may be represented at its meetings by one dele- 
gate, alternates, and advisers. 

(3) Such intergovernmental organizations as the Council may 
decide to invite to any of its meetings may each have one non- voting 
representative in attendance at those meetings. 

(4) The Council shall elect a Chairman and Vice- Chairman who 
shall hold office for one crop year. The Chairman shall have no vote 
and the Vice-Chairman shall have no vote while acting as Chairman. 

ARTICLE 11 

Powers and functions of the Council 

(1) The Council shall establish its Rules of Procedure. 

(2) The Council shall keep such records as are required by the 
terms of this Convention and may keep such other records as it con- 
siders desirable. 

(3) The Council shall publish an annual report and may also pub- 
lish any other information (including, in particular, its annual review 
or any part or summary thereof) concerning matters within the scope 
of this Convention. 

(4) In addition to the powers and functions specified in this Con- 
vention the Council shall have such other powers and perform such 
other functions as are necessary to carry out the terms of this 
Convention. 

(5) The Council may, by two-thirds of the votes cast by the export- 
ing members and two-thirds of the votes cast by the importing mem- 
bers delegate to any of its committees or to the Executive Secretary 
the exercise of powers or functions other than those relating to the 
budget and assessment of contributions contained in paragraphs (2) 
and (3) of Article 19. The Council may at any time revoke such dele- 
gation by a majority of the votes cast. Any decision made under any 
powers or functions delegated by the Council in accordance with this 
paragraph shall be subject to review by the Council at the request of 
any exporting or importing members made within a period which the 
Council shall prescribe. Any decision in respect of which no request for 



273 

review has been made within the prescribed period shall be binding 
on all members. 

(6) In order to enable the Council to discharge its functions under 
this Convention, the Council may request, and members undertake to 
supply, such statistics and information as are necessary for this 
purpose. 

ARTICLE 12 

Votes 

(1) The exporting members shall together hold 1,000 votes and the 
importing members shall together hold 1,000 votes. 

(2) The votes to be exercised by the respective delegations of ex- 
porting members on the Council shall be those specified in Annex A. 

(3) The votes to be exercised by the respective delegations of im- 
porting members on the Council shall be those specified in Annex B. 

(4) Any exporting member may authorize any other exporting 
member, and any importing member may authorize any other import- 
ing member, to represent its interests and to exercise its votes at any 
meeting or meetings of the Council. Satisfactory evidence of such 
authorization shall be submitted to the Council. 

(5) If at any meeting of the Council an exporting member or an 
importing member is not represented by an accredited delegate and 
has not authorized another member to exercise its votes in accordance 
with paragraph (4) of this Article, and if at the date of any meeting 
any member has forfeited, has been deprived of, or has recovered its 
votes under any provisions of this Convention, the total votes to be 
exercised by the exporting members shall be adjusted to a figure equal 
to the total of votes to be exercised at that meeting by the importing 
members and redistributed among exporting members in proportion 
to their votes. 

(6) Whenever any country becomes or any member ceases to be a 
party to this Convention, the Council shall redistribute the votes with- 
in either Annex A or Annex B, as the case may be, proportionally to 
the number of votes held by each member listed in that Annex. 

(7) No exporting or importing member shall have less than one 
vote and there shall be no fractional votes. 

ARTICLE 13 

Seat, sessions and quorum 

(1) The seat of the Council shall be London unless the Council 
decides otherwise. 

(2) The Council shall meet at least once during each half of each 
crop year and at such other times as the Chairman may decide, or as 
otherwise required by this Convention. 

(3) The Chairman shall convene a session of the Council if so re- 
quested by (a) five members or (b) one or more members holding a 
total of not less than 10 percent of the total votes or (c) the Executive 
Committee. 

(4) The presence of delegates with a majority of the votes held by 
tho exporting members and a majority of the votes held by the import- 
ing members prior to any adjustment of votes under Article 12 shall 
be necessary to constitute a quorum at any meeting of the Council. 



274 

AKTICLB 14 

Decisions 

(1) Except where otherwise specified in this Convention, decisions 
of the Council shall be by a majority of the votes cast by the exporting 
members and a majority of the votes cast by the importing members, 
counted separately. 

(2) Each member undertakes to accept as binding all decisions of 
the Council under the provisions of this Convention. 

ARTICLE 15 

Executive Committee 

(1) The Council shall establish an Executive Committee. The mem- 
bers of the Executive Committee shall be not more than four exporting 
members elected annually by the exporting members and not more 
than eight importing members elected annually by the importing 
members. The Council shall appoint the Chairman of the Executive 
Committee and may appoint a Vice-Chairman. 

(2) The Executive Committee shall be responsible to and work 
under the general direction of the Council. It shall have such powers 
and functions as are expressly assigned to it under this Convention 
and such other powers and functions as the Council may delegate to it 
under paragraph (5) of Article 11. 

(3) The exporting members on the Executive Committee shall have 
the same total number of votes as the importing members. The votes 
of the exporting members on the Executive Committee shall be divided 
among them as they shall decide, provided that no such exporting 
member shall have more than 40 per cent of the total votes of those 
exporting members. The votes of the importing members on the Ex- 
ecutive Committee shall be divided among them as they shall decide, 
provided that no such importing member shall have more than 40 per 
cent of the total votes of those importing members. 

(4) The Council shall prescribe rules of procedure regarding voting 
in the Executive Committee and may make such other provision re- 
garding rules of procedure in the Executive Committee as it thinks 
fit. A decision of the Executive Committee shall require the same 
majority of votes as this Convention prescribes for the Council when 
making a decision on a similar matter. 

(5) Any exporting or importing member which is not a member of 
the Executive Committee may participate, without voting, in the dis- 
cussion of any question before the Executive Committee whenever the 
latter considers that the interests of that member are affected. 

ARTICLE 16 

Advisory Sub -Committee on Market Conditions 

(1) The Executive Committee shall establish an Advisory Sub- 
Committee on Market Conditions consisting of technical representa- 
tives of not more than five exporting members and of not more than 
five importing members. The Chairman of the Advisory Sub-Com- 
mittee shall be appointed by the Executive Committee. 

(2) The Advisory Sub-Committee shall keep under continuous 
review current market conditions and shall report to the Executive 



275 

Committee as provided in Article 6. The Advisory Sub-Committee 
shall, in the exercise of its functions, take into account any representa- 
tions made by any exporting or importing member. 

(3) Any member which is not a member of the Advisory Sub- 
Committee may participate in the discussion of any question before 
the Advisory Sub-Committee whenever the latter considers that the 
interests of that member are directly affected. 

(4) The Advisory Sub-Committee shall advise in accordance with 
the relevant Articles of this Convention and on such other matters as 
the Council or the Executive Committee may refer to it, including 
such matters as the Council may refer to it under Article 21 of this 
Convention. 

ARTICLE 17 

Secretariat 

(1) The Council shall have a Secretariat consisting of an Executive 
Secretary, who shall be its chief administrative officer, and such staff 
as may be required for the work of the Council and its Committees. 

(2) The Council shall appoint the Executive Secretary who shall 
be responsible for the performance of the duties devolving upon the 
Secretariat in the administration of this Convention and for the per- 
formance of such other duties as are assigned to him by the Council 
and its Committees. 

(3) The staff shall be appointed by the Executive Secretary in 
accordance with regulations established by the Council. 

(4) It shall be a condition of employment of the Executive Secre- 
tary and of the staff that they do not hold or shall cease to hold finan- 
cial interest in the trade in wheat and that they shall not seek or 
receive instructions regarding their duties under this Convention from 
any Government or from any other authority external to the Council. 

ARTICLE 18 

Privileges and immunities 

(1) The Council shall have legal personality. It shall in particular 
have the capacity to contract, acquire and dispose of movable and 
immovable property and to institute legal proceedings. 

(2) The status, privileges and immunities of the Council in the 
territory of the United Kingdom shall continue to be governed by the 
headquarters Agreement between the Government of the United 
Kingdom of Great Britain and Northern Ireland and the Interna- 
tional Wheat Council signed at London on 28 November 1968. 

(3) The Agreement referred to in paragraph (2) of this Article 
shall be independent of the present Convention. It shall however 
terminate : 

(a) by agreement between the Government of the United 
Kingdom of Great Britain and Northern Ireland and the 
Council, or 

(b) in the event of the seat of the Council being moved from 
the United Kingdom, or 

(c) in the event of the Council ceasing to exist. 

(4) In the event of the seat of the Council being moved from the 
United Kingdom, the Government of the member in which the seat 
of the Council is situated shall conclude with the Council an inter- 



276 

national agreement relating to the status, privileges and immunities 
of the Council, its Executive Secretary, its staff and representatives 
of members at meetings convened by the Council. 

ARTICLE 19 

Finance 

(1) The expenses of delegations to the Council and of representa- 
tives on its Committees and Sub-Committees shall be met by their 
respective Governments. The other expenses necessary for the admin- 
istration of this Convention shall be met by annual contributions from 
the exporting and importing members. The contribution of each such 
member for each crop year shall be in the proportion which the number 
of its votes bears to the total of the votes of the exporting and import- 
ing members at the beginning of that crop year. 

(2) At its first session after this Convention comes into force, the 
Council shall approve its budget for the period ending 30 June 1972 
and assess the contribution to be paid by each exporting and import- 
ing member. 

(3) The Council shall, at a session during the second half of each 
crop year, approve its budget for the following crop year and assess 
the contribution to be paid by each exporting and importing member 
for that crop year. 

(4) [Deemed inoperative as of July 1, 1976 by Article 2(a) of the 
Protocol for the Extension of the Wheat Trade Convention, 1971.] 

(5) Contributions shall be payable immediately upon assessment. 
Any exporting or importing member failing to pay its contribution 
within one year of its assessment shall forfeit its voting rights until 
its contribution is paid, but shall not be relieved of its obligations 
under this Convention, nor shall it be deprived of any of its rights 
under this Convention unless the Council so decides. 

(6) The Council shall, each crop year, publish an audited statement 
of its receipts and expenditures in the previous crop year. 

(7) The Council shall, prior to its dissolution, provide for the settle- 
ment of its liabilities and the disposal of its records and assets. 

ARTICLE 20 

Co-operation with other intergovernmental organizations 

(1) The Council may make whatever arrangements are appropriate 
for consultation or co-operation with the United Nations and its or- 
gans, in particular UNCTAD, and with the FAO and such other spe- 
cialized agencies of the United Nations and intergovernmental or- 
ganizations as may be appropriate. 

(2) The Council, bearing in mind the particular role of UNCTAD 
in international commodity trade, will, as it considers appropriate, 
keep UNCTAD informed of its activities and programmes of work. 

(3) If the Council finds that any terms of this Convention are 
materially inconsistent with such requirements as may be laid down by 
the United Nations or through its appropriate organs and specialized 
agencies regarding intergovernmental commodity agreements, the in- 
consistence shall be deemed to be a circumstance affecting adversely the 
operation of this Convention and the procedure prescribed in para- 
graphs (2) , (3) and (4) of Article 27 shall be applied. 



277 

ARTICLE 21 

Prices and related rights and obligations 

In order to assure supplies of wheat and wheat flour to importing 
members and markets for wheat and wheat flour to exporting members 
at equitable and stable prices, the Council shall at an appropriate time 
examine the questions of prices and related rights and obligations. 
When it is judged that these matters are capable of successful negoti- 
ation with the objective of bringing them into effect within the lite of 
this Convention, the Council shall request the Secretary-General of 
UNCTAD to convene a negotiating conference. 

[Articles 22 through 26 are deemed inoperative as of July 1, 1976 
by Article 2(b) of the Protocol for the Extension of the Wheat Trade 
Convention, 1971.] 

ARTICLE 2 7 

Duration, amendment and withdrawal 

(1) [Deemed inoperative as of July 1, 1976 by Article 2(c) of the 
Protocol for the Extension of the Wheat Trade Convention, 1971.] 

(2) The Council may recommend an amendment of this Convention 
to the members. 

(3) The Council may fix a time within which each member shall 
notify the Government of the United States of America whether or not 
it accepts the amendment. The amendment shall become effective upon 
its acceptance by exporting members which hold two-thirds of the votes 
of the exporting members and bv importing members which hold two- 
thirds of the votes of the importing members. 

(4) Any member which has not notified the Government of the 
United States of America of its acceptance of an amendment by the 
date on which such amendment becomes effective, may, after giving 
such written notice of withdrawal to the Government of the United 
States of America as the Council may require in each case, withdraw 
from this Convention at the end of the current crop year, but shall not 
thereby be released from any obligations under this Convention which 
have not been discharged by the end of that crop year. Any such with- 
drawing member shall not be bound by the provision of the amend- 
ment occasioning its withdrawal. If any member satisfies the Council 
at its first meeting following the effective date of the amendment that 
its acceptance could not be secured in time by reason of constitutional 
or institutional difficulties and declares its intention to apply the 
amendment provisionally pending acceptance of that amendment, the 
Council may extend for such member the period fixed for acceptance 
until these difficulties have been overcome. 

(5) If any member considers that its interests are prejudiced by 
operation of this Convention, it may state its case to the Council and 
the Council shall, within thirty days, examine the matter. If the mem- 
ber concerned considers that notwithstanding the Council's interven- 
tion its interests continue to be prejudiced, it may withdraw from 
this Convention at the end of any crop year by giving written notice 
of withdrawal to the Government of the United States of America at 
least ninety days prior to the end of that crop year, but shall not, 
thereby, be released from any obligations under this Convention which 
have not been discharged by the end of that crop year. 



278 

(6) Any member which becomes a member State of the EEC during 
the currency of the Convention shall notify the Council, and the 
Council' shall within thirty days consider the matter with a view to 
negotiating with that member and the EEC an appropriate adjust- 
ment of their respective rights and obligations under this Convention. 
The Council shall have power, in such circumstances, to recommend 
an amendment in accordance with paragraph (2) of this Article. 

ARTICLE 2 8 

Territorial application 

(1) Any Government may, at the time of signature or ratification, 
acceptance, approval, provisional application of or accession to this 
Convention declare that its rights and obligations under this Con- 
vention shall not apply in respect of one or more of the territories for 
the international relations of which it is responsible. 

(2) With the exception of territories in respect of which a declara- 
tion has been made in accordance with paragraph (1) of this Article, 
the rights and obligations of any Government under this Convention 
shall apply in respect of all territories for the international relations 
of which that Government is responsible. 

(3) Any member may, at any time after its ratification, acceptance, 
approval, provisional application of or accession to this Convention, 
by notification to the Government of the United States of America, 
declare that its rights and obligations under this Convention shall 
apply in respect of one or more of the territories regarding which it 
has made a declaration in accordance with paragraph (1) of this 
Article. 

(4) Any member, may, by giving notification of withdrawal to the 
Government of the United States of America, withdraw from this 
Convention separately in respect of one or more of the territories for 
whose international relations it is responsible. 

(5) When a territory to which this Convention extends under para- 
graphs (2) and (3) of this Article subsequently attains independence, 
the Government of that territory may, within ninety days after the 
attainment of independence, declare by notification to the Government 
of the United States of America that it has assumed the rights and 
obligations of a party to this Convention. 

(6) For the purposes of the redistribution of votes under Article 12, 
any change in the application of this Convention in accordance with 
this Article shall be regarded as a change in participation in this Con- 
vention in such a manner as may be appropriate to the circumstances. 

[Articles 29 through 31 are deemed inoperative as of July 1, 1976, 
by Article 2(d) of the Protocol for the Extension of the Wheat Trade 
Convention, 1971.] 

Annex A 

Votes of exporting members 

Australia 100 Spain A 5 

Argentina 100 Sweden 10 

Bulgaria 5 United States of America 280 

Canada 280 Union of Soviet Socialist Repub- 

European Economic Community- 100 lies - — '_--_-- 100 

Greece 5 Uruguay 5 

Kenya 5 

Mexico 5 Total __-.—_ 1.000 



279 



Annex B 



Votes of importing members 



Algeria 14 Kuwait 

Austria 

Barbados 

Bolivia 

Brazil 

Ceylon 

China ___ 

Colombia 

Costa Rica 

Cuba 

Denmark 

Dominican Republic 

Ecuador 

El Salvador 

European Economic Community- 
Finland 

Guatemala 

India 

Indonesia 

Iran 

Ireland 

Israel 

Japan 

Kingdom of the Netherlands * 

Korea, Republic of 16 



3 



1 Lebanon 9 

1 Libya 5 

5 Malta 2 

71 Mauritius 2 

17 Morocco 10 

19 Nigeria 7 

8 Norway 14 

Pakistan 16 

Panama 2 

Peru 25 

Portugal 18 

Saudi Arabia 10 

South Africa 10 

152 Switzerland 16 

2 Syria 5 

3 Trinidad and Tobago 4 

34 Tunisia 5 

7 Turkey 4 

2 United Arab Republic 65 

7 United Kingdom 183 

5 Vatican City 1 

178 Venezuela 29 

1 

Total 1,-000 



1 With respect to the interests of Netherlands Antilles and Surinam. 



b. Food Aid Convention, 1971 (amended) * 

ARTICLE I 

Objective 

The objective of this Convention is to carry out a food aid pro- 
gramme with the help of contributions for the benefit of developing 
countries. 

ARTICLE II 

International food aid 

[Paragraphs (1), (2), and (3) are deemed inoperative as of July 1, 
1976 by Article II of the Protocol for the Extension of the Food Aid 
Convention, 1971.] 

(4) The contribution of a country making the whole or part of its 
contribution to the programme in the form of cash shall be calculated 
by evaluating the quantity determined for that country (or that por- 
tion of the quantity not contributed in grain) at US $1.73 per bushel. 

(5) Food aid in the form of grain shall be supplied on the following 
terms : 

(a) sales for the currency of the importing country which is 
not transferable and is not convertible into currency or goods and 
services for use by the member country 2 ; 

(b) a gift of grain or a monetary grant to be used to purchase 
grain for the importing country ; or 

(c) sales on credit with payment to be made in reasonable an- 
nual amounts over periods of twenty years or more and with in- 
terest at rates which are below commercial rates prevailing in 
world markets, 3 on the understanding that food aid in the form 
of grains shall be supplied to the maximum extent possible on the 
terms indicated in sub-paragraphs (a) and (b) above. 

(6) Grain purchases shall be made from participating countries. 

(7) In the use of grant funds, special regard shall be had to facili- 
tating grain exports of developing member countries. To this end 
priority shall be given so that not less than 35 per cent of the cash 
contribution to purchase grain for food aid or that part of such con- 
tribution required to purchase 200,000 metric tons of grain shall be used 
to purchase grains produced in developing member countries. 

(8) Contributions in the form of grains shall be placed in f.o.b. 
forward position by donor countries. 

(9) Countries parties to this Convention may, in respect of their 
contribution to the food aid programme, specify a recipient country 
or countries. 



1 22 UST 971 ; TIAS 7144. For a list of states which are parties to the Convention, 
see Dent, of State publication, Treaties in Force. See page 286 for Protocol modifying and 
extending (to June 30, 1978) the Convention. 

2 Under exceptional circumstances an exemption of not more than 10 per cent may be 
granted. 

3 The credit sales agreement may provide for payment of up to 15 per cent of principal 
upon delivery of the grain. 

(280) 



281 

(10) Countries parties to this Convention may make their contribu- 
tion through an international organization or bilaterally. However, 
in accordance with the recommendation made in paragraph (3) of 
resolution 2682 (XXV) of the United Nations General Assembly, 
they shall give full consideration to the advantages of directing a 
greater proportion of food aid through multilateral channels and 
shall place special emphasis on using the World Food Programme. 

ARTICLE III 

Food Aid Committee 

(1) [Deemed inoperative as of July 1. 1976 by Article II of the 
Protocol for the Extension of the Food Aid Convention, 1971.] 

(2) The Committee may, when appropriate, invite representatives 
of the secretariats of other international organizations whose mem- 
bership is limited to Governments that are also Members of the 
United Nations or its specialized agencies to attend as observers. 

(3) The Committee shall : 

(a) Receive regular reports from member countries on the 
amount, content, channelling and terms of their food aid contribu- 
tions under this Convention ; 

(b) Keep under review the purchase of grains financed by 
cash contributions with particular reference to the obligation in 
paragraph (7) of Article II concerning purchase of grain from 
developing participating countries. 

(4) The Committee shall : 

(a) Examine the way in which the obligations undertaken 
under the food aid programme have been fulfilled; 

(b) Exchange information on a regular basis on the function- 
ing of the food aid arrangements under this Convention, in par- 
ticular, where information is available, on its effects on food 
production in recipient countries. The Committee shall report as 
necessary. 

(5) For the purposes of paragraph (4) of this Article the Com- 
mittee may receive information from recipient countries and may 
consult with them. 

ARTICLE IV 

Administrative provisions 

The Food Aid Committee as set up according to the provisions of 
Article III shall use the services of the Secretariat of the Interna- 
tional Wheat Council for the performance of such administrative 
duties as the Committee may request, including the processing and 
distribution of documentation and reports. 

ARTICLE V 

Defaults and disputes 

In the case of a dispute concerning the interpretation or applica- 
tion of this Convention or of a default in obligations under this Con- 
vention, the Food Aid Committee shall meet and take appropriate 
action. 

[ARTICLES VI through XIV are deemed inoperative as of 
July 1, 1976 by Article IT of the Protocol for the Extension of the 
Food Aid Convention,- 1971.] 



c. Protocols for the Further Extension of the Wheat Trade Con- 
vention and Food Aid Convention Constituting the Interna- 
tional Wheat Agreement, 1971 

Open for signature at Washington March 17-April 7, 1976; Entered into force 
June 19, 1976, with respect to certain provisions, and July 1, 1976, with respect 
to other provisions; signed by the U.S. with statement 1 April 5, 1976; declara- 
tion of provisional application, with statement, deposited by the U.S. June 17, 
1976; ratification advised by the Senate of the U.S. August 23, 1976; instru- 
ment of ratification signed by the President July 18, 1977; instrument of rati- 
fication deposited August 17, 1977 

Preamble 

The Conference to establish the texts of the Protocols for the third 
extensions of the Conventions constituting the International Wheat 
Agreement, 1971. 

Considering that the International Wheat Agreement of 1949 was 
revised, renewed or extended in 1953, 1956, 1959, 1962, 1965, 1966, 
1967, 1968, 1971, 1974 and 1975, 

Considering that the International Wheat Agreement, 1971, consist- 
ing of two separate legal instruments, the Wheat Trade Convention, 
1971 and the Food Aid Convention, 1971, both of which were further 
extended by Protocol in 1975, will expire on 30 June 1976, 

Has established the texts of Protocols for the third extension of the 
Wheat Trade Convention, 1971 and for the third extension of the Food 
Aid Convention, 1971. 

Protocol for the Third Extension of the Wheat Trade 
Convention, 1971 2 

The Governments party to this Protocol, 

Considering that the Wheat Trade Convention, 1971 (hereinafter re- 
fererred to as "the Convention") of the International Wheat Agree- 
ment, 1971, which was further extended by Protocol in 1975, expires on 
30 June 1976, 

Have agreed as follows : 

ARTICLE 1 

Extension*, Expiry, and Termination of the Convention 

Subject to the provisions of Article 2 of this Protocol, the Conven- 
tion shall continue in force between the parties to this Protocol until ■ 
30 June 1978, provided that, if a new international agreement cover- 
ing wheat enters into force before 30 June 1978, this Protocol shall re- 

*The following statement was submitted by Secretary of Agriculture Earl L. Butz at 
the time of signature : 

"I wish to state on behalf of the Government of the United States of America that the 
instrument of ratification of the Protocol for the Third Extension of the Food Aid Conven- 
tion, 1971, by the United States will not be deposited if the other major donors do not 
become parties to that Protocol." 

2 For a list of states which are parties to the Protocol, see the Dept. of State's publica- 
tion, Treaties in Force. 

(282) 



283 

main in force only until the date of entry into force of the new 
agreement. 

ARTICLE 2 

Inoperative Provisions of the Convention 

The following provisions of the Convention shall be deemed to be 
inoperative with effect from 1 July 1976 : 

(a) paragraph (4) of Article 19; 

(b) Articles 22 to 26 inclusive ; 

(c) paragraph (1) of Article 27; 

(d) Articles 29 to 31 inclusive. 

ARTICLE 3 

Definition 

Any reference in this Protocol to a "Government" or "Governments" 
shall be construed as including a reference to the European Economic 
Community (hereinafter referred to as "the Community"). Accord- 
ingly, any reference in this Protocol to "signature" or to the "deposit 
of instruments of ratification, acceptance, approval or conclusion" or 
"an instrument of accession" or "a declaration of provisional appli- 
cation" by a Government shall, in the case of the Community, be con- 
strued as including signature or declaration of provisional application 
on behalf of the Community by its competent authority and the de- 
posit of the instrument required by the institutional procedures of the 
Community to be deposited for the conclusion of an international 
agreement. 

ARTICLE 4 

Finance 

The initial contribution of any exporting or importing member 
acceding to this Protocol under paragraph (1) (b) of Article 7 thereof, 
shall be assessed by the Council on the basis of the votes to be dis- 
tributed to it and the period remaining in the current crop year, but 
the assessments made upon other exporting and importing members 
for the current crop year shall not be altered. 

ARTICLE 5 

Signature 

This Protocol shall be open for signature in Washington from 17 
March 1976 until and including 7 April 1976 by Governments of coun- 
tries party to the Convention as further extended by Protocol, or 
which are provisionally regarded as party to the Convention as fur- 
ther extended by Protocol, on 17 March 1976, or which are members 
of the United Xations, of its specialized agencies or of the International 
Atomic Energy Agency, and are listed in Annex A or Annex B to the 
Convention. 

ARTICLE 6 

Ratification, Acceptance, Approval, or Conclusions 

This Protocol shall be subject to ratification, acceptance, approval 
or conclusion by each signatory Government in accordance with its 
respective constitutional or institutional procedures. Instruments of 
ratification, acceptance, approval or conclusion shall be deposited with 
the Government of the United States of America not later than 18 



284 

June 1976, except that the Council may grant one or more extensions 
of time to any signatory Government that has not deposited its instru- 
ment of ratification, acceptance, approval or conclusion by that date. 

ARTICLE 7 

Accession 

( 1 ) This Protocol shall be open for accession 

(a) until 18 June 1976 by the Government of any member 
listed in Annex A or B to the Convention as of that date, except 
that the Council may grant one or more extensions of time to any 
Government that has not deposited its instrument by that date and 

(b) after 18 June 1976 by the Government of any member of 
the United Nations, of its specialized agencies or of the Inter- 
national Atomic Energy Agency upon such conditions as the 
Council considers appropriate by not less than two-thirds of the 
votes cast by exporting members and two-thirds of the votes cast 
by importing members. 

(2) Accession shall be effected by the deposit of an instrument of 
accession with the Government of the United States of America. 

(3) Where, for the purposes of the operation of the Convention 
and this Protocol, reference is made to members listed in Annex A or 
B to the Convention, any member the Government of which has ac- 
ceded to the Convention on conditions prescribed by the Council, or to 
this Protocol in accordance with paragraph (1) (b) of this Article, 
shall be deemed to be listed in the appropriate Annex. 

ARTICLE 8 

Provisional Application 

Any signatory Government may deposit with the Government of 
the United States of America a declaration of provisional application 
of this Protocol. Any other Government eligible to sign this Protocol 
or whose application for accession is approved by the Council may 
also deposit with the Government of the United States of America a 
declaration of provisional application. Any Government depositing 
such a declaration shall provisionally apply this Protocol and be pro- 
visionally regarded as a party thereto. 

ARTICLE 9 

Entry Into Force 

(1) This Protocol shall enter into force among those Governments 
which have deposited instruments of ratification, acceptance, ap- 
proval, conclusion or accession, or declarations of provisional applica- 
tion, in accordance with Articles 6, 7 and 8 of this Protocol by 18 June 
1976, as follows: 

(a) on 19 June 1976, with respect to all provisions of the Con- 
vention other than Articles 3 to 9 inclusive and Article 21, and 

(b) on 1 July 1976, with respect to Articles 3 to 9 inclusive, 
and Article 21 of the Convention, 

if such instruments of ratification, acceptance, approval, conclusion 
or accession, or declarations of provisional application have been de- 
posited not later than 18 June 1976 on behalf of Governments rep- 
resenting exporting members which held at least 60 percent of the 
votes set out in Annex A and representing importing members which 



285 

held at least 50 percent of the votes set out in Annex B, or would have 
held such votes respectively if they had been parties to the Convention 
on that date. 

(2) The Protocol shall enter into force for any Government that 
deposits an instrument of ratification, acceptance, approval, conclusion 
or accession after 19 June 1976 in accordance with the relevant pro- 
visions of this Protocol, on the date of such deposit except that no part 
of it shall enter into force for such a Government until that part enters 
into force for other Governments under paragraph (1) or (3) of this 
Article. 

(3) If this Protocol does not enter into force in accordance with 
paragraph (1) of this Article, the Governments which have deposited 
instruments of ratification, acceptance, approval, conclusion or acces- 
sion, or declarations of provisional application, may decide by mutual 
consent that it shall enter into force among those Governments that 
have deposited instruments of ratification, acceptance, approval, con- 
clusion or accession, or declarations of provisional application. 

ARTICLE 10 

Notification by Depository Government 

The Government of the United States of America as the depositary 
Government shall notify all signatory and acceding Governments of 
each signature, ratification, acceptance, approval, conclusion, provi- 
sional application of, and accession to. this Protocol, as well as of each 
notification and notice received under Article '27 of the Convention 
and each declaration and notification received under Article 28 of the 
Convention. 

ARTICLE 11 

Certified Copy of the Protocol 

As soon as possible after the definitive entry into force of this 
Protocol, the depositary Government shall send a certified copy of this 
Protocol in the English, French, Russian and Spanish languages to 
the Secretary-General of the United Nations for registration in ac- 
cordance with Article 102 of the Charter of the United Nations. Any 
amendments to this Protocol shall likewise be communicated. 

ARTICLE 12 

Relationship of Preamble to Protocol 

This Protocol includes the Preamble to the Protocols for the third 
extension of the International Wheat Agreement, 1971. 

IN WITNESS WHEREOF the undersigned, having been duly 
authorized to this effect by their respective Governments or authori- 
ties, have signed this Protocol on the dates appearing opposite their 
signatures. 

The texts of this Protocol in the English, French, Russian and 
Spanish languages shall be equally authentic. The originals shall be 
deposited with the Government of the United States of America, which 
shall transmit certified copies thereof to each signatory and acceding 
party and to the Executive Secretary of the Council. 



286 

Protocol for the Third Extension of the Food Aid Convention, 

1971 l 

The parties to this Protocol, 

Considering that the Food Aid. Convention. 1971 (hereinafter re- 
ferred to as "the Convention") of the International Wheat Agree- 
ment, 1971, which was further extended by Protocol in 1975, expires on 
30 June 1976, 

Have agreed as follows : 

ARTICLE I 

Extension, Expiry, and Termination of the Promotion 

Subject to the provisions of Article II of this Protocol, the Con- 
vention shall continue in force between the parties to this Protocol 
until 30 June 1978, provided that, if a new agreement covering food 
aid enters into force before 30 June 1978, this Protocol shall remain in 
force only until the date of entry into force of the new agreement. 

article n 

Inoperative Provisions of the Convention 

The provisions of paragraphs (1), (2) and (3) of Article II, of 
paragraph (1) of Article III, and of Articles VI and XIV, inclusive, 
of the Convention shall be deemed to be inoperative with effect from 
1 July 1976. 

ARTICLE III 

International Food Aid 

(1) The parties to this Protocol agree to contribute as food aid to 
the developing countries, wheat, coarse grains or products derived 
therefrom, suitable for human consumption and of an acceptable type 
and quality, or the cash equivalent thereof, in the minimum annual 
amounts specified in paragraph (2) below: 

(2) The minimum annual contribution of each party to this Protocol 
is fixed as follows : 

Metric tons 

Argentina 23, 000 

Australia 225, 000 

Canada 496, 000 

European Economic Community 1, 287, 000 

Finland 14, 000 

Japan 225, 000 

Sweden 35, 000 

Switzerland 32, 000 

United States of America 1,890,000 

(3) For the purpose of the operation of this Protocol, any party 
which has signed this Protocol pursuant to paragraph (2) of Article V 
thereof, or which has acceded to this Protocol pursuant to paragraph 
(2) or (3) of Article VII thereof, shall be deemed to be listed in para-" 
graph (2) of Article III of this Protocol together with the minimum 
contribution of such party as determined in accordance with the rele- 
vant provisions of Article V or Article VII of this Protocol. 

1 For a list of states which are parties to the Protocol, see the Dept. of State's publi- 
cation, Treaties in Force. 



287 

ARTICLE IV 

Food Aid Committee 

There shall be estabished a Food Aid Committee whose member- 
ship shall consist of the parties listed in paragraph (2) of Article III 
of this Protocol and of those others that become parties to this Proto- 
col. The Committee shall appoint a Chairman and a Vice-Chairman. 

article v 
Signature 

(1) This Protocol shall be open for signature in Washington from 
17 March 1976 until and including 7 April 1976 by the Governments 
of Argentina, Australia, Canada, Finland, Japan, Sweden, Switzer- 
land and the United States of America, and by the European Eco- 
nomic Community and its member States, provided that they sign both 
this Protocol and the Protocol for the third extension of the Wheat 
Trade Convention, 1971. 

(2) This Protocol shall also be open for signature, on the same con- 
ditions, to any party to the Food Aid Convention, 1967 which is not 
enumerated in paragraph (1) of this Article, provided that its contri- 
bution is at least equal to that which it agreed to make in the Food 
Aid Convention, 1967. 

ARTICLE VI 

Ratification, Acceptance, Approval, or Conclusion 

This Protocol shall be subject to ratification, acceptance, approval 
or conclusion by each signatory in accordance with its constitutional 
or institutional procedures, provided that it also ratifies, accepts, ap- 
proves or concludes the Protocol for the third extension of the Wheat 
Trade Convention, 1971. Instruments of ratification, acceptance, ap- 
proval or conclusion shall be deposited with the Government of the 
United States of America not later than 18 June 1976, except that the 
Food Aid Committee may grant one or more extensions of time to any 
signatory that has not deposited its instrument of ratification, ac- 
ceptance, approval or conclusion by that date. 

ARTICLE VII 

Accession 

(1) This Protocol shall be open for accession by any party referred 
to in Article V of this Protocol, provided it also accedes to the Proto- 
col for the third extension of the Wheat Trade Convention, 1971 and 
provided further that in the case of any party referred to in para- 
graph (2) of Article V its contribution is at least equal to that which 
it agreed to make in the Food Aid Convention, 1967. Instruments of 
accession under this paragraph shall be deposited not later than 18 
June 1976, except that the Food Aid Committee may grant one or 
more extensions of time to any party that has not deposited its instru- 
ment of accession by that date. 

(2) The Food Aid Committee may approve accession to this Pro- 
tocol, as a donor, by the Government of any member of the United 
Nations, of its specialized agencies or of the International Atomic 
Energy Agency, on such conditions as the Food Aid Committee con- 



288 

siders appropriate, provided that the Government also accedes at the 
same time to the Protocol for the third extension of the Wheat Trade 
Convention, 1971, if not already a party to it. 

(3) Accession shall be effected by the deposit of an instrument of 
accession with the Government of the United States of America. 

ARTICLE VIII 

Provisional Application 

Any party referred to in Article V of this Protocol may deposit 
with the Government of the United States of America a declaration 
of provisional application of this Protocol, provided it also deposits 
a declaration of provisional application of the Protocol for the third 
extension of the Wheat Trade Convention, 1971. Any other party 
whose application for accession is approved may also deposit with the 
Government of the United States of America a declaration of pro- 
visional application, provided that the party also deposits a declara- 
tion of provision application of the Protocol for the third extension 
of the Wheat Trade Convention, 1971, unless it is already a party to 
that Protocol or has already deposited a declaration of provisional 
application of that Protocol. Any such party depositing such a dec- 
laration shall provisionally apply this Protocol and be provisionally 
regarded as a party thereto. 

ARTICLE IX 

Entry Into Force 

(1) This Protocol shall enter into force for those parties that have 
deposited instruments of ratification, acceptance, approval, conclusion 
or accession 

(a) on 19 June 1976 with respect to all provisions other than 
Article II of the Convention and Article III of the Protocol, and 

(b) on 1 July 1976 with respect to Article II of the Convention 
and Article III of the Protocol 

provided that all parties listed in paragraph (1) of Article V of this 
Protocol have deposited such instruments or a declaration of provi- 
sional application by 18 June 1976 and that the Protocol for the third 
extension of the Wheat Trade Convention, 1971 is in force. For any 
other party that deposits an instrument of ratification, acceptance, 
approval, conclusion or accession after the entry into force of the 
Protocol, this Protocol shall enter into force on the date of such 
deposit. 

(2) If this Protocol does not enter into force in accordance with the 
provisions of paragraph (1) of this Article, the parties which by 
19 June 1976 have deposited instruments of ratification, acceptance, 
approval, conclusion or accession, or declarations of provisional appli- 
cation may decide by mutual consent that it shall enter into force 
among those parties that have deposited instruments of ratification, 
acceptance, approval, conclusion or accession, or declarations of pro- 
visional application, provided that the Protocol for the third exten- 
sion of the Wheat Trade Convention, 1971 is in force, or they may 
take whatever other action they consider the situation requires. 



289 



ARTICLE X 

Notification by Depositary Government 

The Government of the United States of America as the depositary 
Government shall notify all signatory and acceding parties of each 
signature, ratification, acceptance, approval, conclusion, provisional 
application of, and accession to this Protocol. 

ARTICLE XI 

Certified Copy of the Protocol 

As soon as possible after the definitive entry into force of this Proto- 
col, the depositary Government shall send a certified copy of this 
Protocol in the English, French, Russian and Spanish languages to 
the Secretary-General of the United Xations for registration in ac- 
cordance with Article 102 of the Charter of the United Nations. Any 
amendments to this Protocol shall likewise be communicated. 

article xn 

Relationship of Preamble to Protocol 

This Protocol includes the Preamble to the Protocols for the third 
extension of the International Wheat Agreement, 1971. 

IN WITNESS WHEREOF the undersigned, having been duly 
authorized to this effect by their respective Governments or authori- 
ties, have signed this Protocol on the dates appearing opposite their 
signatuures. 

The texts of this Protocol in the English, French, Russian and 
Spanish languages shall all be equally authentic. The originals shall 
be deposited with the Government of the United States of America, 
which shall transmit certified copies thereof to each signatory and 
acceding party. 



H. FINANCIAL INSTITUTIONS 

CONTENTS 

Page 

1. International Monetary Fund 293 

a. Articles of Agreement (amended) 293 

b. Text of the Decision of the Executive Directors of the Inter- 

national Monetary Fund, January 5, 1962 372 

c. Exchange of Correspondence Between M. Wilfrid Baumgartner, 

Minister of Finance, France, and Douglas Dillon, Secretary 

of the Treasury, United States 379 

2. International Bank for Reconstruction and Development (Amended 

Articles of Agreement) 381 

3. International Finance Corporation (Amended Articles of Agreement) __ 405 

4. Inter-American Development Bank (Amended Agreement Establishing 

the Bank) 421 

5. International Development Association (Articles of Agreement) 457 

6. Asian Development Bank (Articles of Agreement) 477 

7. African Development Fund (Agreement Establishing the Fund) 509 

8. Settlement of Investment Disputes 536 

a. Convention on the Settlement of Investment Disputes Between 

States and Nationals of Other States 536 

b. Resolution 65-14, Approval for Submission of Settlement of 

Investment Disputes 553 



(291) 



1. International Monetary Fund 
a. Articles of Agreement (amended) 

CONTENTS 

Page 

Introductory Article 297 

I. Purposes 298 

II. Membership 298 

1. Original members 298 

2. Other members 298 

III. Quotas and Subscriptions 299 

1. Quotas _ 299 

2. Adjustment of quotas 299 

3. Subscriptions: time, place, and form of payment 299 

4. Payments when quotas are changed 300 

5. Substitution of securities for currency. __ 301 

IV. Par Values of Currencies 301 

1. Expression of par values 301 

2. Gold purchases based on par values 301 

3. Foreign exchange dealings based on parity 301 

4. Obligations regarding exchange stability 302 

5. Changes in par values 302 

6. Effect of unauthorized changes 302 

7. Uniform changes in par values — 303 

8. Maintenance of gold value of the Fund's assets 303 

9. Separate currencies within a member's territories 303 

V. Transactions with the Fund 305 

1 . Agencies dealing with the Fund 305 

2. Limitation on the Fund's operations 305 

3. Conditions governing use of the Fund's resources. _ 306 

4. Waiver of conditions 307 

5. Ineligibility to use the Fund's resources 308 

6. Purchases of currencies from the Fund for gold 308 

7. Repurchase by a member of its currency held by the 

Fund 308 

8. Charges _ 311 

9. Remuneration. _ 312 

VI. Capital Transfers 316 

1. Use of the Fund's resources for capital transfers 316 

2. Special provisions for capital transfers 316 

3. Controls of capital transfers 316 

VII. Scarce Currencies 316 

1. General scarcity of currency 316 

2. Measures to replenish the Fund's holdings of scarce 

currencies : 317 

3. Scarcity of the Fund's holdings. _. 317 

4. Administration of restrictions 318 

5. Effect of other international agreements on restrictions. 318 
VIII. General Obligations of Members 318 

1. Introduction 318 

2. Avoidance of restrictions on current payments 318 

3. Avoidance of discriminatory currency practices 318 

4. Convertibility of foreign held balances 318 

5. Furnishing of information 319 

6. Consultation between members regarding existing inter- 

national agreements 320 

(293) 



294 

Page 

IX. Status, Immunities and Privileges 320 

1. Purposes of Article 320 

2. Status of the Fund 320 

3. Immunity from judicial process 321 

4. Immunity from other action 321 

5. Immunity of archives 321 

6. Freedom of assets from restrictions 321 

7. Privilege for communications 321 

8. Immunities and privileges of officers and employees 321 

9. Immunities from taxation 321 

10. Application of Article _ 322 

X . Relations with Other International Organizations 322 

XI. Relations with Non-Member Countries 322 

1. Undertakings regarding relations with non-member 

countries 322 

2. Restrictions on transactions with non-member countries. 322 
XII. Organization and Management 323 

1. Structure of the Fund 323 

2. Board of Governors 323 

3. Executive Directors 324 

4. Managing Director and staff 326 

5. Voting 327 

6. Reserves and distribution of net income 327 

7. Publication of reports 329 

8. Communication of views to members 329 

XIII. Offices and Depositories 329 

1. Location of offices 329 

2. Depositories 330 

3. Guarantee of the Fund's assets 330 

XIV. Transitional Period 330 

1. Introduction 330 

2. Exchange restrictions 330 

3. Notification to the Fund 331 

4. Action of the Fund relating to restrictions 331 

5. Nature of transitional period 331 

XV. Withdrawal from Membership 332 

1 . Right of members to withdraw 332 

2. Compulsory withdrawal 332 

3. Settlement of accounts with members withdrawing 332 

XVI. Emergency Provisions 332 

1 . Temporary suspension 332 

2. Liquidation of the Fund 333 

XVII. Amendments 333 

XVIII. Interpretation 334 

XIX. Explanation of Terms 334 

XX. Inaugural Provisions 337 

1 . Entry into force 337 

2. Signature 337 

3. Inauguration of the Fund 338 

4. Initial determination of par values 338 

XXI. Special Drawing Rights 340 

1 . Authority to allocate special drawing rights 340 

2. Unit of value 340 

XXII. General Account and Special Drawing Account 341 

1. Separation of operations and transactions 341 

2. Separation of assets and property 341 

3. Recording and information 341 

XXIII. Participants and Other Holders of Special Drawing Rights 342 

1. Participants 342 

2. General Account as a holder 342 

3. Otherholders 342 

XXIV. Allocation and Cancellation of Special Drawing Rights 343 

1. Principles and considerations governing allocation and 

cancellation 343 

2. Allocation and cancellation — 343 

3. Unexpected major developments _- 344 

4. Decisions on allocations and cancellations 344 



295 

Page 

XXV. Operations and Transactions in Special Drawing Rights 345 

1. Use of special drawing rights 345 

2. Transactions between participants 345 

3. Requirement of need 346 

4. Obligation to provide currency 347 

5. Designation of participants to provide currency 347 

6. Reconstitution 347 

7. Operations and transactions through the General 

Account 348 

8. Exchange rates 349 

XXVI. Special Drawing Account Interest and Charges 349 

1. Interest 349 

2. Charges 349 

3. Rate of interest and charges 349 

4. Assessments 350 

5. Payment of interest, charges, and assessments 350 

XXVII. Administration of the General Account and the Special Drawing 

Account 350 

XXVIII. General Obligations of Participants 352 

XXIX. Suspension of Transactions in Special Drawing Rights 352 

1. Emergency provisions 352 

2. Failure to fulfill obligations 352 

XXX. Termination of Participation 353 

1. Right to terminate participation 353 

2. Settlement on termination 353 

3. Interest and charges 354 

4. Settlement of obligation to the Fund 354 

5. Settlement of obligation to a terminating participant 354 

6. General Account transactions 2 354 

XXXI. Liquidation of the Special Drawing Account 355 

XXXII. Explanation of Terms with Respect to Special Drawing Rights. _ 355 

SCHEDULES 

A. Quotas 356 

B. Provisions with Respect to Repurchase by a Member of Its Currency 

Held by the Fund _ 357 

C. Election of Executive Directors 362 

D. Settlement of Accounts with Members Withdrawing 364 

E. Administration of Liquidation 365 

F. Designation 367 

G. Reconstitution 368 

H. Termination of Participation 368 

I. Administration of Liquidation of the Special Drawing Account 369 



a. Articles of Agreement of the International Monetary Fund ' 

(amended) 

Articles of agreement between the United States of America and other powers 
respecting the International Monetary Fund. Formulated at the United Na- 
tions Monetary and Financial Conference, Bretton Woods, New Hampshire, 
July 1 to July 22, 1944; signed at Washington December 27, 1945; instru- 
ment of acceptance by the United States of America deposited December 20, 
1945; effective December 27, 1945. Amended July 28, 1969.* 



Note. — The Board of Governors of the Fund approved resolu- 
tion numbered 31-4 on March 22, 1976 which provides for amend- 
ments to the Articles of Agreement. Public Law 94-564 (Bretton 
Woods Agreements Act, Amendments, 90 Stat. 2660) authorizes 
the United States acceptance of such amendments but it is not 
expected that the amendments will enter into force until early 
1978. In order to reflect the changes in the Articles of Agree- 
ment of the IMF which will occur upon entry into force of 
the amendments, all current language which will be deleted is 
enclosed in brackets ([ ]) while all new language which will be 
added is printed in italics. Readers should refer to the publica- 
tion, Treaties in Force for current status of the amendments. 



The Governments on whose behalf the present Agreement is signed 
agree as follows : 

Introductory Article 

(i) The International Monetary Fund is established and shall 
operate in accordance with the provisions of this Agreement 
as originally adopted[.] and [as] subsequently amended [in 
order to institute a facility based on special drawing rights and 
to effect certain other changes]. 

(ii) To enable the Fund to conduct its operations and trans- 
actions, the Fund shall maintain a General [Account] Depart- 
ment and a Special Drawing [Account]. Rights Department. 
Membership in the Fund shall give the right to participation in 
the Special Drawing [Account] Rights Department. 

(iii) Operations and transactions authorized by this Agree- 
ment shall be conducted through the General [Account] Depart- 
ment, consisting in accordance with the provisions of this Agree- 



1 60 Stat. 1401 : TIAS 1501. For a list of states which are parties to the Fund, see Dept. 
of State publication. Treaties in Force. 

1 New provisions contained in Articles XXI to XXXII added to the original articles of 
agreement deal with "Special Drawing Rights". Similarly, Schedules F through I were 
added dealing with Special Drawing Rights as well. Schedule B was rewritten by the 
amending provisions dealing with Repurchase by a member of Its currency held by the 
fund. 

(297) 



298 

ment of the General Resources Account, the Special Disburse- 
ment Account, and the Investment Account; except that oper- 
ations and transactions involving special drawing rights shall 
be oonducted through the Special Drawing [Account] Rights 
Department. 

Article I — Purposes 

The purposes of the International Monetary Fund are : 

(i) To promote international monetary cooperation through 
a permanent institution which provides the machinery for con- 
sultation and collaboration on international monetary problems. 

(ii) To facilitate the expansion and balanced growth of inter- 
national trade, and to contribute thereby to the promotion and 
maintenance of high levels of employment and real income and 
to the development of the productive resources of all members aa 
primary objectives of economic policy. 

(iii) To promote exchange stability, to maintain orderly ex- 
change arrangements among members, and to avoid competitive 
exchange depreciation. 

(iv) To assist in the establishment of a multilateral system of 
payments in respect of current transactions between members and 
in the elimination of foreign exchange restrictions which hamper 
the growth of world trade. 

(v) To give confidence to members by making the [Fund's re- 
sources] general resources of the Fund temporarily available to 
them under adequate safeguards, thus providing them with op- 
portunity to correct maladjustments in their balance of payments 
without resorting to measures destructive of national or interna- 
tional prosperity. 

(vi) In accordance with the above, to shorten the duration and 
lessen the degree of disequilibrium in the international balances 
of payments of members. 
The Fund shall be guided in all its policies and decisions by the 
purposes set forth in this Article. 

Article II — Membership 

SECTION 1. ORIGINAL MEMBERS 

The original members of the Fund shall be those of the countries 
represented at the United Nations Monetary and Financial Conference 
whose governments accept membership before [the date specified in 
Article XX, Section 2(e)] December 31, 1945. 

SECTION 2. OTHER MEMBERS 

Membership shall be open to [the governments of] other countries 
nt such times and in accordance with such terms as may be prescribed 
by the [Fund] Board of Governors. These terms, including the terms 
for subscriptions, shall be based on principles consistent with those 
applied to other countries that are already members. 



299 
Article III — Quotas and Subscriptions 

SECTION 1. QUOTAS AND PAYMENT OF SUBSCRIPTIONS 

Each member shall be assigned a quota expressed in special drawing 
rights. The quotas of the members represented at the United Nations 
Monetary and Financial Conference which accept membership before 
[the date specified in Article XX, Section 2(g)] December 31, 19J^5 
shall be those set forth in Schedule A. The quotas of other members 
shall be determined by the [Fund] Board of Governors. The sub- 
scription of each member shall be equal to its quota and shall be paid 
in full to the Fund at the appropriate depository. 

SECTION 2. ADJUSTMENT OF QUOTAS 

(a) The [Fund] Board of Governors shall at intervals of not more 
than five years conduct a general review, and if it deems it appropriate 
propose an adjustment, of the quotas of the members. It may also, if 
it thinks fit, consider at any other time the adjustment of any partic- 
ular quota at the request of the member concerned. [An eighty-five 
percent majority of the total voting power shall be required for any 
change in quotas proposed as the result of a general review and a four- 
fifths majority of the total voting power shall be required for any 
other change in quotas. No quota shall be changed without consent of 
the member concerned.] 

(b) The Fund may at any time propose an increase in the quotas 
of those members of the Fund that were members on August 31, 1975 
in proportion to their quotas on that date in a cumulative amount not 
in excess of amounts transferred under Article I', Section 12(f) (i) 
and (j) from the Special Disbursement Account to the General Re- 
sources Account. 

(c) An eighty-five percent majority of the total voting power shall 
be required for any change in quotas. 

(d) The quota of a member shall not be changed until the member 
has consented and until payment has been made unless payment is 
deemed to have been made in accordance with Section 3(b) of this 
Article. 

[SECTION 3. SUBSCRIPTIONS I TIME, PLACE, AND FORM OF PAYMENT 

[(a) The subscription of each member shall be equal to its quota 
and shall be paid in full to the Fund at the appropriate depository 
on or before the date when the member becomes eligible under Article 
XX, Section 4(c) or (a 7 ), to buy currencies from the Fund. 

[(£>) Each member shall pay in gold, as a minimum, the smaller of — 
( i) twenty-five percent of its quota ; or 

(ii) ten percent of its net official holdings of gold and United 
States dollars as at the date when the Fund notifies members under 
Article XX, Section 4(a) that it will shortly be in a position to 
begin exchange transactions. 
Each member shall furnish to the Fund the data necessary to deter- 
mine its net official holdings of gold and United States dollars. 

[(c) Each member shall pay the balance of its quota in its own 
currency. 



300 

£(d) If the net official holdings of gold and United States dollars of 
any member as at the date referred to in (b) (ii) above are not ascer- 
tainable because its territories have been occupied by the enemy, the 
Fund shall fix an appropriate alternative date for determining such 
holdings. If such date is later than that on which the country becomes 
eligible under Article XX, Section 4(c) or (d) , to buy currencies from 
the Fund, the Fund and the member shall agree on a provisional gold 
payment to be made under (b) above, and the balance of the member's 
subscription shall be paid in the member's currency, subject to appro- 
priate adjustment between the member and the Fund when the net 
official holdings have been ascertained.] 

SECTION S. PAYMENTS WHEN QUOTAS ARE CHANGED 

(a) Each member which consents to an increase in its quota under 
Section 2(a) of this Article shall, within a period determined by the 
Fund, pay to the Fund twenty-five percent of the increase in special 
drawing rights, but the Board of Governors may prescribe that this 
payment may be made, on the same basis for all members, in whole 
or in part in the currencies of other members specified, with their 
concurrence, by the Fund, or in the member 's own currency. A non- 
participant shall pay in the currencies of other members specified 
by the Fund, with their concurrence, a proportion of the increase 
corresponding to the proportion to be paid in special drawing rights 
by participants. The balance of the increase shall be paid by the mem- 
ber in its own currency. The Fundus holdings of a member's currency 
shall not be increased above the level at which they would be subject 
to charges under Article V, Section 8(b) (ii), as a result of payments 
by other members under this provision. 

(b) Each member which consents to an increase in its quota under 
Section 2(b) of this Article shall be deemed to have paid to the Fund 
an amount of subscription equal to such increase. 

(c) If a member consents to a reduction in its quota, the Fund shall, 
within sixty days, pay to the member an amount equal to the reduc- 
tion. The payment shall be made in the member's currency and in 
such amount of special drawing rights or the currencies of other 
members specified, with their concurrence, by the Fund as is necessary 
to prevent the reduction of the Fund's holdings of the currency below 
the new quota, provided that in exceptional circumstances the Fund 
may reduce its holdings of the currency below the new quota by pay- 
ment to the member in its own currency. 

(d) A seventy percent majority of the total voting power shall be 
required for any decision under (a) above, except for the determina- 
tion of a period and the specification of currencies under that provision. 

[SECTION 4. PAYMENTS WHEN QUOTAS ARE CHANGED 

1(a) Each member which consents to an increase in its quota shall, 
within thirty days after the date of its consent, pay to the Fund 
twenty-five percent of the increase in gold and the balance in its own 
currency. If, however, on the date when the member consents to an in- 
crease, its monetary reserves are less than its new quota, the Fund may 
reduce the proportion of the increase to be paid in gold. 



301 

[(ft) If a member consents to a reduction in its quota, the Fund shall, 
within thirty days after the date of the consent, pay to the member 
an amount equal to the reduction. The payment shall be made in the 
member's currency and in such amount of gold as may be necessary to 
prevent reducing the Fund's holdings of the currency below seventy- 
five percent of the new quota. 

[(c) A majority of eighty-five percent of the total voting power shall 
be required for any decisions dealing with the payment, or made with 
the sole purpose of mitigating the effects of the payment, of increases 
in quotas proposed as the result of a general review- of quotas.] 

SECTION [5] 4. SUBSTITUTION OF SECURITIES FOR CURRENCY 

The Fund shall accept from any member, in place of any part of the 
member's currency in the General Resources Account which in the 
judgment of the Fund is not needed for its operations and transactions, 
notes or similar obligations issued by the member or the depository 
designated by the member under Article XIII, Section 2, which shail 
be non-negotiable, non-interest bearing and payable at their [parj 
face value on demand by crediting the account of the Fund in the 
designated depository. This Section shall apply not only to currency 
subscribed by members but also to any currency otherwise due to, 
or acquired by, the Fund and to be placed in the General Resources 
Account. 

[Article IV — Par Values of Currencies 

[section 1. expression of par values 

[(a) The par value of the currency of each member shall be ex- 
pressed in terms of gold as a common denominator or in terms of the 
United States dollar of the weight and fineness in effect on July 1, 
1944. 

[(ft) All computations relating to currencies of members for the pur- 
pose of applying the provisions of this Agreement shall be on the basis 
of their par values. 

[SECTION 2. GOLD PURCHASES BASED ON PAR VALUES 

[The Fund shall prescribe a margin above and below par value for 
transactions in gold by members, and no member shall buy gold at a 
price above par value plus the prescribed margin, or sell gold at a price 
below par value minus the prescribed margin. 

[SECTION 3. FOREIGN EXCHANGE DEALINGS BASED ON PARITY 

[The maximum and the minimum rates for exchange transactions 
between the currencies of members taking place within their territories 
shall not differ from parity. 

(i) in the case of spot exchange transactions, by more than 
one percent ; and 

(h) in the case of other exchange transactions, by a margin 
which exceeds tho margin for spot exchange transactions by more 
than the Fund considers reasonable. 



302 

[SECTION 4. OBLIGATIONS REGARDING EXCHANGE STABILITY 

[(a) Each member undertakes to collaborate with the Fund to pro- 
mote exchange stability, to maintain orderly exchange arrangments 
with other members, and to avoid competitive exchange alterations. 

1(b) Each member undertakes, through appropriate measures con- 
sistent with this Agreement, to permit within its territories exchange 
transactions between its currency and the currencies of other members 
only within the limits prescribed under Section 3 of this Article. 
A member whose monetary authorities, for the settlment of inter- 
national transactions, in fact freely buy and sell gold within the limits 
prescribed by the Fund under Section 2 of this Article shall be deemed 
to be fulfilling this undertaking. 

[SECTION 5. CHANGES IN PAR VALUES 

[(&) A member shall not propose a change in the par value of its 
currency except to correct a fundamental disequilibrium. 

[ ( b ) A change in the par value of member's currency may be made 
only on the proposal of the member and only after consultation with 
the Fund. 

1(c) When a change is proposed, the Fund shall first take into 
account the changes, if any, which have already taken place in the 
initial par value of the member's currency as determined under Article 
XX, Section 4. If the proposed change, together with all previous 
changes, whether increases or decreases. 

(i) does not exceed ten percent of the initial par value, the 
Fund shall raise no objection, 

(ii) does not exceed a further ten percent of the initial par 
value, the Fund may either concur or object, but shall declare its 
attitude within seventy-two hours if the member so requests, 

(iii) is not within (i) or (ii) above, the Fund may cither con- 
cur or object, but shall be entitled to a longer period in which to 
declare its attitude. 
1(d) Uniform changes in par values made under Section 7 of this 
Article shall not be taken into account in determining whether a 
proposed change falls within (i), (ii), or (iii) or (c) above. 

[(e) A member may change the par value of its currency without 
the concurrence of the Fund if the change does not affect the inter- 
national transactions of members of the Fund. 

[(/) The fund shall concur in a proposed change which is within 
the terms of (c) (ii) or (c) (iii) above if it is satisfied that the change 
is necessary to correct a fundamental disequilibrium. In particular, 
provided it is so satisfied, it shall not object to a proposed change 
because of the domestic social or political policies of the member 
proposing the change. 

[SECTION 6. EFFECT OF UNAUTHORIZED CHANGES 

[If a member changes the par value of its currency despite the 
objection of the Fund, in cases where the Fund is entitled to object, 
the member shall be ineligible to use the resources of the Fund unless 
the Fund otherwise determines; and if, after the expiration of a 



303 

reasonable period, the difference between the member and the Fund 
continues, the matter shall be subject to the provisions of Article XV, 
Section 2(b). 

[SECTION 7. UNIFORM CHANGES IN PAR VALUES 

[Notwithstanding the provisions of Section 5(b) of this Article, 
the Fund by an eighty-five percent majority of the total voting power 
may make uniform proportionate changes in the par values of the 
currencies of all members. The par value of a member's currency shall, 
however, not be changed under this provision if, within seventy-two 
hours of the Fund's action, the member informs the Fund that it docs 
not wish the par value of its currency to be changed by such action. 

[SECTION 8. MAINTENANCE OF GOLD VALUE OF THE FUND'S ASSETS 

[(#) The gold value of the Fund's assets shall be maintained not- 
withstanding changes in the par or foreign exchange value of the 
currency of any member. 

1(b) Whenever (i) the par value of a member's currency is reduced, 
or (ii) the foreign exchange value of a member's currency has, in the 
opinion of the Fund, depreciated to a significant extent within that 
member's territories, the member shall pay to the Fund within a reason- 
able time an amount of its own currency equal to the reduction in the 
gold value of its currency held by the Fund. 

1(c) Whenever the par value of a member's currency is increased, 
the Fund shall return to such member within a reasonable time an 
amount in its currency equal to the increase in the gold value of its 
currency held by the Fund. 

[(d) The provisions of this Section shall apply to a uniform pro- 
portionate change in the par values of the currencies of all members, 
unless at the time when such a change is made the Fund decides other- 
wise by an eighty-five percent majority of the total voting power. 

[SECTION 9. SEPARATE CURRENCIES WITHIN A MEMBER'S TERRITORIES 

[A member proposing a change in the par value of its currency shall 
be deemed, unless it declares otherwise, to be proposing a correspond- 
ing change in the par value of the separate currencies of all territories 
in respect of which it has accepted this Agreement under Article XX, 
Section 2(g). It shall, however, be open to a member to declare that 
its proposal relates either to the metropolitan currency alone, or only 
to one or more specified separate currencies, or to the metropolitan 
currency and one or more specified separate currencies. 

Article IV — Obligations Regarding Exchange Arrangements 

SECTION 1. GENERAL OBLIGATIONS OF MEMBERS 

Recognizing that the essential purpose of the international monetary 
system is to provide a framework that facilitates the exchange of goods, 
services, and capital among countries, and that sustains sound economic 
growth, and that a. principal objective is the continuing development 
of the orderly underlying conditions that are necessary for financial 



304 

and economic stability, each member undertakes to collaborate with the 
Fund and other members to assure orderly exchange arrangements and 
to promote a stable system of exchange rates. In particular, each mem- 
ber shatl: 

(i) endeavor to direct its economic and financial policies toward 
the objective of fostering orderly economic growth with reason- 
able price stability, with due regard to its circumstances; 

(ii) seek to promote stability by fostering orderly underlying 
economic and financial conditions and a monetary system that does 
not tend to produce erratic disruptions; 

(Hi) Avoid manipulating exchange rates or the international 
monetary system in order to prevent effective balance of payments 
adjustment or to gain an unfair competitive advantage over other 
members; and 

(iv) Follow exchange policies compatible with the undertakings 
under this Section. 

SECTION 2. GENERAL EXCHANGE ARRANGEMENTS 

(a) Each member shall notify the Fund, within thirty days after 
the date of the second amendment of this Agreement, of the exchange 
arrangements it intends to apply in fulfillment of its obligations under 
Section 1 of this Article, and shall notify the Fund promptly of any 
changes in its exchange arrangements. 

(b) Under an international monetary system of the kind prevailing 
on January 1, 1976, exchange arrangements may include (i) the main- 
tenance by a member of a value for its currency in terms of the special 
drawing right or another denominator, other than gold, selected by 
the member, or (ii) cooperative arrangements by which members main- 
tain the value of their currencies in relation to the value of the cur- 
rency or currencies of other members, or (Hi) other exchange arrange- 
ments of a members choice. 

(c) To accord with the development of the international monetary 
system, the Fund, by an eighty -five percent majority of the total vot- 
ing power, may make provision for general exchange arrangements 
without limiting the right of members to have exchange arrangements 
of their choice consistent with the purposes of the Fund and the obli- 
gations under Section 1 of this Article. 

SECTION S. SURVEILLANCE OVER EXCHANGE ARRANGEMENTS 

(a) The Fund shall oversee the international monetary system in 
order to ensure its effective operation, and shall oversee the compliance 
of each member ivith its obligations under Section 1 of this Article. 

(b) In order to fulfill its functions under (a) above, the Fund shall 
exercise firm surveillance over the exchange rate policies of members, 
and shall adopt specific principles for the guidance of all members 
with respect to those policies. Each member shall provide the Fund 
ivith the information necessary for such surveillance, and, when re- 
quested by the Fund, shall consult with it on the member's exchange 
rate policies. The principles adopted by the Fund shall be consistent 
with cooperative arrangements by which members maintain the value 
of their currencies in relation to the value of the currency or curren- 
cies of other members, as well as with other exchange arrangements 



305 

of a members choice consistent with the purposes of the Fund and 
Section 1 of this Article. These principles shall respect the domestic 
social and political policies of members, and in applying these prin- 
ciples the Fund shall pay due regard to the circumstances of members. 

SECTION k- PAR VALUE'S 

The Fund may determine, by an eighty -five percent majority of 
the total voting power, that international economic conditions permit 
the introduction of a widespread system of exchange arrangements 
based on stable but adjustable par values. The Fund shall make the 
determination on the basis of the underlying stability of the world 
economy, and for this purpose shall take into account price movements 
and rates of expansion in the economies of members. The determina- 
tion shall be made in light of the evolution of the international mone- 
tary system, with particular reference to sources of liquidity, and, in 
order to ensure the effective operation of a system of par values, to 
arrangements under which both members in surplus and members in 
deficit in their balances of payments take prompt, effective, and sym- 
metrical action to achieve adjustment* as well as to arrangements for 
intervention and the treatment of imbalances. Upon making such- 
determination, the Fund shall notify members that the provisions of 
Schedule C apply. 

SECTION 5. SEPARATE CURRENCIES WITHIN A MEMBER'S TERRITORIES 

(a) Action by a member with respect to its currency under this 
Article shall be deemed to apply to the separate currencies of all ter- 
ritories in respect of which the member has accepted this Agreement 
under Article XXXI, Section 2(g) unless the member declares that 
its action relates either to the metropolitan currency alone, or only 
to one or more specified separate currencies, or to the metropolitan 
currency and one or more specified separate currencies. 

(b) Action by the Fund under this Article shall be deemed to relate 
to all currencies of a member referred to in (a) above uidess the Fund 
declares otherwise. 

Article V — Operations and Transactions [With] of the Fund 

SECTION 1. AGENCIES DEALING WITH THE FUND 

Each member shall deal with the Fund only through its Treasury, 
central bank, stabilization fund or other similar fiscal agency and the 
Fund shall deal only with or through the same agencies. 

SECTION 2. LIMITATION ON THE FUND'S OPERATIONS AND TRANSACTIONS 

(a) Except as otherwise provided in this Agreement, [operations] 
transactions on the account of the Fund shall be limited to transactions 
for the purpose of supplying a member, on the initiative of such mem- 
ber, with special drawing rights or [currency] currencies of [another 
member] other members from the general resources of the Fund, 
which shall be held in the General Resources Account, in exchange for 
[gold or] the currency of the member desiring to make the purchase. 

(b) If requested, the Fund may decide to perform financial and 
technical services, including the administration of resources contrib- 



306 

uted by members, that are consistent with the purposes of the Fund. 
Operations involved in the performance of such financial services shall 
not be on the account of the Fund. Services under this subsection shall 
not impose any obligation on a member without its consent. 



(a) The Fund shall adopt policies on the use of its general resources, 
including policies on stand-by or similar arrangements, and may adopt 
special policies for special balance of payments problems, that will 
assist members to solve their balance of payments problems in a man- 
ner consistent with the provisions of this Agreement and that will 
establish adequate safeguards for the temporary use of the general 
resources of the Fund. 

L( a )1(b) A member shall be entitled to [buy] purchase the [cur- 
rency] currencies of another member from the Fund in exchange for 
an equivalent amount of its own currency subject to the following 
conditions. 

(i) The member desiring to purchase the currency represents 
that it is presently needed for making in that currency payments 
which are consistent with the provisions of this Agreement; 

(ii) The Fund has not given notice under Article VII, Sec- 
tion 3, that its holdings of the currency desired have become 
scarce ; 

(iii) The proposed purchase would be a [gold] reserve tranche 
purchase, or would not cause the Fund's holdings of the pur- 
chasing member's currency to [increase by more than twenty-five] 
exceed two hundred percent of its quota [during the period of 
twelve months ending on the date of the purchase or to exceed 
two hundred percent of its quota]; 

(iv) The Fund has not previously declared under Section 5 

of this Article, Article [IV, Section 6,] Article VI, Section 1, or 

Article [XV] XXVI, Section 2(a), that the member desiring 

to purchase is ineligible to use the general resources of the Fund. 

[(6) A member shall not be entitled without the permission of the 

Fund to use the Fund's resources to acquire currency to hold against 

forward exchange transactions. 

1(c) A member's use of the resources of the Fund shall be in accord- 
ance with the purposes of the Fund. The Fund shall adopt policies on 
the use of its resources that will assist members to solve their balance 
of payments problems in a manner consistent with the purposes of 
the Fund and that will establish adequate safeguards for the tem- 
porary use of its resources. 

[(<^) A representation by a member under (a) above shall be ex- 
amined by the Fund to determine whether the proposed purchase would 
be consistent with the provisions of this Agreement and with the 
policies adopted under them, with the exception that proposed gold 
tranche purchases shall not be subject to challenge.] 

(c) The Fund shall examine a request for a purchase to determine 
whether the proposed purchase would be consistent with the provi- 
sions of this Agreement and the policies adopted under them, pro- 
vided that inquests for reserve tranche purchases shall not be subject 
to challenge. 



307 

(d) The Fund shall adopt policies and procedures on the selection 
of currencies to be sold that take into account , in consultation with 
members, the balance of payments and reserve position of members 
and development in the exchange markets, as well as the desirability 
of promoting over time balanced positions in the Fund, provided that 
if a member represents that it is proposing to purchase the currency 
of another member because the purchasing member wishes to obtain 
am, equivalent amount of its own currency offered by the other member, 
it shall be entitled to purchase the currency of the other member unless 
the Fund has given notice under Article VII, Section 3 that its hold- 
ings of the currency have become scarce. 

(e) (i) Each member shall ensure that balances of its currency 
purchased from the Fund are balances of a freely usable cur- 
rency or can be exchanged at the time of purchase for a freely 
usable currency of its choice at an exchange rate between the two 
currencies equivalent to the exchange rate between them on the 
basis of Article XIX, Section 7(a). 

(ii) Each member whose currency is purchased from the Fund 
or is obtained in exchange for currency purchased from the Fund 
shall collaborate with the Fund and other members to enable 
such balances of its currency to be exchanged, at the time of pur- 
chase, for the freely usable currencies of other members. 

(Hi) An exchange under (i) above of a currency that is not 
freely usable shall be made by the member whose currency is pur- 
chased unless that member and the purchasing member agree on 
another procedure. 

(iv) A member purchasing from the Fund, the freely usable 

currency of another member and wishing to exchange it at the 

time of purchase for another freely usable currency shall make 

the exchange with the other member if requested by that member. 

The exchange shall be made for a, freely usable currency selected 

by the other member at the rate of exchange refewed to in (i) 

above. 

(f) Under policies and procedures which it shall adopt, the Fund 

may agree to provide a participant making a purchase in accordance 

with this Section with special drawing rights instead of the currencies 

of other members. 

SECTION 4. WAIVER OF CONDITIONS 

The Fund may in its discretion, and on terms which safeguard its 
interests, waive any of the conditions prescribed in Section 3 [(#)] 
(b) (Hi) and (iv) of this Article, especially in the case of members 
with a record of avoiding large or continuous use of the Fund's gen- 
eral resources. In making a waiver it shall take into consideration 
periodic or exceptional requirements of the member requesting the 
waiver. The Fund shall also take into consideration a member's will- 
ingness to pledge as collateral security [gold, silver, securities, or 
other] acceptable assets having a value sufficient in the opinion of the 
Fund to protect its interests and may require as a condition of waiver 
the pledge of such collateral security. 



308 



Whenever the Fund is of the opinion that any member is using the 
general resources of the Fund in a manner contrary to the purposes of 
the Fund, it shall present to the member a report setting forth the 
views of the Fund and prescribing a suitable time for reply. After pre- 
senting such a report to a member, the Fund may limit the use of its 
general resources by the member. If no reply to the report is received 
from the member within the prescribed time, or if the reply received 
is unsatisfactory, the Fund may continue to limit the member's use 
of the general resources of the [Fund's resources] Fund or may, after 
giving reasonable notice to the member, declare it ineligible to use the 
general resources of the Fund. 

[SECTION 6. PURCHASES OF CURRENCIES FROM THE FUND FOR GOLD 

[(&) Any member desiring to obtain, directly or indirectly, the cur- 
rency of another member for gold shall, provided that it can do so 
with equal advantage, acquire it by the sale of gold to the Fund. 

[(Z>) Nothing in this Section shall be deemed to preclude any mem- 
ber from selling in any market gold newly produced from mines located 
within its territories.] 

SECTION 6. OTHER PURCHASES AND SALES OF SPECIAL DRAWING RIGHTS 

BY THE FUND 

(a) The Fund may accept special drawing rights offered by a 
participant in exchange for an equivalent amount of the currencies 
of other members. 

(b) The Fund may provide a participant, at its request, with 
special drawing rights for an equivalent amount of the currencies 
of other members. The Fundus holdings of a member's currency shall 
not be increased as a result of these transactions above the level at 
which the holdings would be subject to charges under Section 8(b) 
(ii) of this Article. 

(c) The currencies provided or accepted by the Fund under this 
Section shall be selected in accordance with policies that take into 
account the principles of Section 3(d) or 7(i) of this Article. The 
Fund may enter into transactions under this Section only if a member 
whose currency is provided or accepted by the Fund concurs in that 
use of its currency. 

[SECTION 7. REPURCHASE BY A MEMBER OF ITS CURRENCY HELD 

BY THE FUND 

[(&) A member may repurchase from the Fund and the Fund shall 
sell for gold any part of the Fund's holdings of its currency in excess 
of its quota. 

1(b) At the end of each financial year of the Fund, a member shall 
repurchase from the Fund with each type of monetary reserve, as 
determined in accordance with Schedule B, part of the Fund's holdings 
of its currency under the following conditions : 

(i) Each member shall use in repurchases of its own currency 
from the Fund an amount of its monetary reserves equal in value 



309 

to the following changes that have occurred during the year: 
one-half of any increase in the Fund's holdings of the member's 
currency, plus one-half of any increase, or minus one-half of any 
decrease, in the member's monetary reserves, or, if the Fund's 
holdings of the member's currency have decreased, on-half of any 
increase in the member's monetary reserves minus one-half of the 
decrease in the Fund's holdings of the member's currency. This 
rule shall not apply when a member's monetary reserves have 
decreased during the year by more than the Fund's holdings of 
its currency have increased. 

(ii) If after the repurchase described in (i) above (if required) 
has been made, a member's holdings of another member's cur- 
rency (or of gold acquired from that member) are found to have 
increased by reason of transactions in terms of that currency with 
other members or persons in their territories, the member whose 
holdings of such currency (or gold) have thus increased shall use 
the increase to repurchase its own currency from the Fund. 
1(c) None of the adjustments described in (b) above shall be carried 
to a point at which — 

(i) the member's monetary reserves are below one hundred fifty 
percent of its quota, or 

(ii) the Fund's holdings of its currency are below seventy-five 
percent of its quota, or 

(iii) the Fund's holdings of any currency required to be used 
are above seventy-five percent of the quota of the member con- 
cerned, or 

(iv) the amount repurchased exceeds twenty-five percent of tho 

quota of the member concerned. 

Z(d) The Fund by an eighty-five percent majority of the total 

voting power may revise the percentages in (c) (i) and (iv) above 

and revise and supplement the rules in paragraph 1(c), (d), and (e) 

and paragraph 2(b) of Schedule B.] 

SECTION 7. REPURCHASE BY A MEMBER OF ITS CURRENCY HELD BY THE FUND 

(a) A member shall be entitled to repurchase at any time the Fund's 
holdings of its currency that are subject to charges under Section 8(b) 
of this Article. 

(b) A member that has made a purchase under Section 3 of this 
Article will be expected normally, as its balance of payments and 
reserve position improves, to repurchase the Fund's holdings of its 
currency that result from the purchase and are subject to charges 
under Section 8(b) of this Article. A member shall repurchase these 
holdings if, in accordance with policies mi repurchase that the Fund 
shall adopt and after consultation with the member, the Fund repre- 
sents to the member that it should repurchase because of an improve- 
ment in its balance of payments and reserve position. 

(c) A member that has made a purchase under Section 3 of this 
Article shall repurchase the Fund's holdings of its currency that result 
from the purchase and are subject to charges under Section 8(b) of 
this Article not later than five years after the date on which the pur- 
chase was made. The Fund may prescribe that repurchase shall be 
made by a member in installments during the period beginning three 
years and ending five years after the date of a purchase. The Fund, by 



310 

an eighty-five percent majority of the total voting power, may change 
the periods for repurchase under this subsection, and any period so 
adopted shall apply to all members. 

(d) The Fund, by an eighty -five percent majority of the total vot- 
ing power, may adopt periods other than those that apply in accord- 
ance with (c) above, which shall be the same for all members, for the 
repurchase of holdings of currency acquired by the Fund pursuant to 
a special policy on the use of its general resources. 

(e) A member shall repurchase, in accordance ivith policies that the 
Fund shall adopt by a seventy percent majority of the total voting 
power, the Fund's holdings of its currency that are not acquired as a 
result of purchases and are subject to charges under Section 8(b) (ii) 
of this Article. 

(/) A decision prescribing that under a policy on the use of the gen- 
eral resources of the Fund the period for repurchase under (c) or (d) 
above shall be shorter than the one in effect under the policy shall 
apply only to holdings acquired by the Fund subsequent to the effective 
date of the decision. 

(g) The Fund, on the request of a member, may postpone the date 
of discharge of a repurchase obligation, but not beyond the maximum 
period under (c) or (d) above or under policies adopted by the Fund 
under (e) above, unless the Fund determines, by a, seventy percent 
majority of the total voting power, that a longer period for repurchase 
which is consistent with the temporary use of the general resources of 
the Fund is justified because discharge on the due date would residt in 
exceptional hardship for the member. 

(h) The Fund's policies under Section 3(d) of this Article may be 
supplemented by policies under which the Fund may decide after con- 
sultation with a member to sell under Section 3(b) of this Article its 
holdings of the member's currency that have not been repurchased in 
accordance with this Section 7, without prejudice to any action that the 
Fund may be authorized to take under any other provision of this 
Agreement. 

(i) All repurchases under this Section shall be made with special 
drawing rights or with the currencies of other members specified by the 
Fund. The Fund shall adopt policies and procedures with regard to 
the currencies to be used by members in making repurchases that take 
into account the principles of Section 3(d) of this Article. The Fund's 
holdings of a member's currency that is used in repurchase shall not be 
increased by the repurchase above the level at which they would be sub- 
ject to charges under Section 8(b) (ii) of this Article. 

(j) (i) If a member's currency specified by the Fund under (i) 
above is not a freely usable currency, the member shall ensure that 
the repurchasing member can obtain it at the time of the re- 
purchase in exchange for a freely usable currency selected by the 
member whose currency has been specified. An exchange of cur- , 
rency under this provision shall take place at an exchange rate 
between the two currencies equivalent to the exchange rate between 
them on the basis of Article XIX, Section 7(a). 

(ii) Each member whose currency is specified by the Fund for 
repurchase shall collaborate with the Fund and other members 
to enable repurchasing members, at the time of the repurchase, to 



311 

obtain the specified currency in exchange for the freely usable cur- 
rencies of other members. 

(Hi) A v n exchange under (j) (i) above shall be made with the 
member ivhose currency is specified unless that member and the 
repurchasing member agree on another procedure. 

(iv) If a repurchasing member wishes to obtain, at the time of 
the repurchase, the freely usable currency of another member 
specified by the Fund under (/) abore. it shall, if requested by the 
other member, obtain the currency from the other member in ex- 
change for a freely usable currency at the rate of exchange re- 
ferred to in (j) (?) above. The Fund may adopt regulations on the 
freely usable currency to be provided in an exchange. 

SECTION 8. CHARGES 

\_(a) Any member buying the currency of another member from the 
Fund in exchange for its own currency shall pay, in addition to the 
parity price, a service charge uniform for all members of not less than 
one-half percent and not more than one percent, as determined by the 
Fund, provided that the Fund in its discretion may levy a service 
charge of less than one-half percent on gold tranche purchases. 

[(6) The Fund may lew a reasonable handling charge on any mem- 
ber buying gold from the Fund or selling gold to the Fund. 

[(<") The Fund shall levy charges uniform for all members which 
shall be payable by any member on the average daily balances of its 
currency held by the Fund in excess of its quota. These charges shall 
be at the following rates : 

(i) On amounts not more than twenty-five percent in excess of 
the quota: no charge for the first three months; one-half percent 
per annum for the next nine months; and thereafter an increase 
in the charge of one-half percent for each subsequent year. 

(ii) On amounts more than twenty-five percent and not more 
than fifty percent in excess of the quota: and additional one-half 
percent for the firsts year; and an additional one-half percent 
for each subsequent year. 

(iii) On each additional bracket of twenty -five percent in excess 

of the quota: an additional one-half percent for the first year; 

and an additional one-half percent for each subsequent year. 

[(<7) Whenever the Fund's holdings of a member's currency are such 

that the charge applicable to any bracket for any period has reached 

the rate of four percent per annum, the Fund and the member shall 

consider means by which the Fund's holdings of the currency can be 

reduced. Thereafter, the charges shall rise in accordance with the 

provisions of (c) above until they reach five percent and failing 

agreement, the Fund may then impose such charges as it deems 

appropriate. 

1(e) The rates referred to in (c) and (d) above may be changed by 
a three-fourths majority of the total voting power. 

[(/) All charges shall be paid in gold. If, however, the member's 
monetary reserves are less than one-half of its quota, it shall pay in 
gold only that portion of the charges due which such reserves bear 
to one-half of its quota, and shall pay the balance in its own currency.] 



312 

(a) (i) The Fund shall levy a service charge on the purchase by 
a member of special drawing rights or the currency of another 
member held in the General Resources Account in exchange for its 
own currency, provided that the Fund may levy a lower service 
charge on reserve tranche purchases than on other purchases. The 
service charge on reserve tranche purchases shall not exceed one- 
half of one percent. 

(ii) The Fund may levy a charge for stand-by or similar ar- 
rangements. The Fund may decide that the charge for an arrange- 
ment shall be offset against the service charge levied under (i) 
above on purchases under the arrangement. 

(b) The Fund shall levy charges on its average daily balances of a 
member's currency held in the General Resources Account to the extent 
that they 

(i) have been acquired under a policy that has been the subject 
of an exclusion under Article XXX (c),or 

(ii) exceed the amount of the member's quota after excluding 
any balances referred to in (i) above. 
The rates of charge normally shall rise at intervals during the period 
in which balances are held. 

(c) If a member fails to make a repurchase required under Section 7 
of this Article, the Fund, after consultation with the member on the re- 
duction of the Fundus holdings of its currency, may impose such 
charges as the Fund deems appropriate on its holdings of the member's 
currency that should have been repurchased. 

(d) A seventy percent majority of the total voting power shall be 
required for the determination of the rates of change under (a) and (b) 
above, ivhich shall be uniform for all members, and under (c) above. 

(e) A member shall pay all charges in special drawing rights, pro- 
vided that in exceptional circumstances the Fund may permit a member 
to pay charges in the currencies of other members specified by the 
Fund, after consultation with them, or in its oion currency. The Fund's 
holdings of a member's currency shall not be increased as a result of 
payments by other members under this provision above the level at 
which they would be subject to charges under (b) (ii) above. 

SECTION 0. REMUNERATION 

[(&) The Fund shall pay remuneration, at a rate uniform for all 
members, on the amount oy which seventy-five percent of a member's 
quota exceeded the average of the Fund's holdings of the member's 
currency, provided that no account shall be taken of holdings in 
excess of seventy-five percent of quota. The rate shall be one and 
one-half percent per annum, but the Fund in its discretion may in- 
crease or reduce this rate, provided that a three-fourths majority of 
the total voting power shall be required for any increase above two_ 
percent per annum or reduction below one percent per annum. 

Z(b) Remuneration shall be paid in gold or a member's own cur- 
rency as determined bv the Fund.] 

(a) The Fund shall pay remuneration on the amount by which the 
percentage of quota prescribed under (b) or (c) below exceeds the 
Fund's average daily balances of a member's currency held in the 
General Resources Account other than balances acquired under a 



313 

policy that has been the subject of an exclusion under Article XXX (c) . 
The rate of remuneration, which shall be determined by the Fund by 
a seventy percent majority of the total voting power, shall be the 
same for all members and shall be not more than, nor less than four- 
fifths of, the rate of interest under Article XX, Section 3. In establish- 
ing the rate of remuneration, the Fund shall take into account the rates 
of charge under A rticle V, Section 8(b). 

(b) The percentage of quota applying for the purposes of (a) above 
shall be : 

(i) For each member that became a member before the second 
amendment of this Agreement, a percentage of quota correspond- 
ing to severity-five percent of its quota on the date of the second 
amendment of this Agreement, and for each memmber that became 
a member after the date of the second amend nu nt of this Agree- 
ment, a percentage of quota calculated by dividing the total of 
the ainounts corresponding to the perci ntages of quota that apply 
to the other members on the date on which the member became a 
member by the total of the quotas of the other members on the 
same date ; plus 

( it) The amounts it has paid to the Fund in currency or special 
draining rights under Article III. Section 3(a) since the date 
applicable under (b) (t) abovt ; and minus 

(Hi) The amounts it has received from the Fund it) currency 
or special drawing rights undt r Article II L Section 3(c) since the 
date applicable undt r (b) (i) abovt . 

(c) The Fund, by a seventy percent majority of the total voting 
power, may raise tin latest percentage of quota applying for the 
purposes of (a) abort to each nu mfa rto: 

(i) A percentage, not in excess of one hundred percent, that 
shall be determined for each member on the basis of the same 
criteria for all membi rs, or 

(ii) One hundred percent for all members. 

(d) Remuneration shall be paid in spt cial drawing rights, provided 
that either the Fund or the member may decide that the payment to 
the member shall be made in its own currency. 

SECTION 10. COMPUTATIONS 

(a) The value of the Fund's assets held in the accounts of the 
General Department shall be expressed in terms of the special drawing 
right. 

(b) All computations relating to currencies of members for the 
purpose of applying the provisions of this Agreement, except Article 
IV and Schedule (', shall be at the rates at which the Fund accounts 
for these currencies in accordance with Section 11 of this Article. 

(c) Computations for the determination of amounts of currency 
in relation to quota for the purpose of applying the provisions of this 
Agreement shall not include currency held in the Special Disbursement 
Account or in the Investment Account. 

SECTION 11. MAINTENANCE OF VALUE 

(a) The value of the currencies of members held in the General 
Resources Account shall be maintained in terms of the special drawing 



314 

right in accordance with exchange rates under Article XIX, Section 
7(a). 

(b) An adjustment in the Fund's holdings of a member's currency 
pursuant to this /Section shall be made on the occasion of the use of 
tliat currency in an operation or transaction between the Fund and 
another member and at such other times as the Fund may decide or 
the member may request. Payments to or by the Fund in respect of an 
adjustment shall be made within a reasonable time, as determined by 
the Fund, after the date of adjustment, and at any other time re- 
quested by the member. 

SECTION 12. OTHER OPERATIONS AND TRANSACTIONS 

(a) The Fund shall be guided in all its policies and decisions under 
this Section by the objectives set forth in Article VIII, Section 7 and 
by the objective of avoiding the management of the price, or the estab- 
lishment of a fixed price, in the gold market. 

(b) Decisions of the Fund to engage in operations or transactions 
under (c), (d), and (e) below shall be made by an eighty-five percent 
majority pf the total voting power. 

(c) the Fund may sell gold for the currency of any member after 
consulting the member for whose currency the gold is sold, provided 
that the Fund's holdings of a member's currency held in the General 
Resources Account shall not be increased by the sale above the level 
at which they would be subject tp charges under Section 8(b) (ii) of 
this Article without the concurrence of the member, and provided 
that, at the request of the member, the Fund at the time of sale shall 
exchange for the currency of another member such part of the cur- 
rency received as would prevent such an increase. The exchange of 
a currency for the currency of another member shall be made after 
consultatipn with that member, and shall not increase the Fund's 
holdings of that member's currency above the level at which they 
ivould be subject to charges under Section 8(b) (ii) of this Article. 
The Fund shall adopt policies and procedures with regard to ex- 
changes that take into account the principles applied under Section 
7(i) of this Article. Sales undsr this provisipn to a member shall be 
at a price agreed for each transaction on the basis of prices in the 
market. 

(d) The Fund may accept payments from a member in gold instead 
of special drawing rights or currency in any operations or transactions 
under this agreement. Payments to the Fund under this provision 
shall be at a price agreed for each operation or transaction on the basis 
of prices in the market. 

(e) The Fund may sell gold held by it on the date of the second 
amendment of this Agreement to those members that were members 
on August 31, 1975 and that agree to buy it, in proportion to their 
quptas on that date. If the Fund intends to sell gold under (c) above 
for the purpose of (/) (ii) below, it may sell to each developing mem- - 
ber that agrees to buy it that portion of the gold which, if sold under 
(c) above, would have produced the excess that could have been dis- 
tributed to it under (f) (Hi) below. The gold that would, be sold under 
this provision to a member that has been declared ineligible to use the 
general resources of the Fund under Section 5 of this Article shall 



315 

be sold to it when the ineligibility ceases, unless the Fund decides to 
make the sale sooner. The sale of gold to a member under this subsec- 
tipn (e) shall be made in exchange for its currency and at a price 
equivalent at the time of sale to one special draiving right per 0.888 
671 gram of fine gold. 

(f) Whenever under (c) above the Funds sells gold held by it on the 
date of the second, amendment of this Agreement, an amount of the 
proceeds equivalent at the time of sale to one special drawing right per 
0.888 671 gram of fine gold shall be placed In the General Resources 
Account and, except as the Fund may decide otherwise under (g) be- 
low, any excess shall be held in the Special Disbursement Account. The 
assets held in the Special Disbursement Account shall be held sepa- 
rately from the other accounts of the General Department, and may be 
used at any time : 

(i) to make transfers to the General Resources Account for im- 
mediate use in operations and transactions authorized by provi- 
sions of this Agreement other than this Section ; 

(ii) for operations and transactions that are authorized by 
other provisions of this Agreement but are consistent with the pur- 
poses of the Fund. Under this subsection (/) (ii) balance of pay- 
ments assistance may be made in difficult circumstance*, and for 
this purpose the Fund shall take into account the level of per cap- 
ita income; 

(Hi) for distribution to those developing members that were 
members on August 31. 1975. in proportion to their quotas on that 
date, of such part of the assets that the Fund decides to use for the 
purposes of (ii) above as corresponds to the proportion of the 
quotas of these members on the date of distribution to the total of 
the quotas of all members on the same date, provided that the dis- 
tribution under this provision- to a member that has been declared 
ineligible to use the general resources of the Fund under Section 
5 of this Article shall be made when the ineligibility ceases, unless 
the Fund decides to make distribution sooner. 
Decisions to use assets pursuant to (i) above shall be taken by a seventy 
percent majority of the total voting power, and decisions pursuant to 
(ii) and (Hi) above shall be taken by an eighty- fee percent majority 
of the total voting power. 

(g) The Fund may decide, by an eighty-five percent majority of the 
total voting power, to transfer a part of the excess referred to in (f) 
above to the Investment Account for use pursuant to the provisions of 
Article XII, Section 6(f) . 

(h) Pending uses specified under (f) above, the Fund may invest a 
member s currency held in the Special Disbursement Account in mar- 
ketahle obligations of that member or in marketable obligations of in- 
ternational financial organizations. The income of investment and in- 
terest received under (f) (ii) above shall be placed in the Special Dis- 
bursement Account. Xo investment shall be made without the concur- 
rence of the member whose currency is used to make the investment. 
The Fund shall invest only in obligations denominated in special draw- 
ing rights or in the currency used for investment. 

(i) The General Resources Account shall be reimbursed from time 
to time in respect of the expenses of administration of the Special Dis- 
bursement Account paid from the General Resources Account by trans- 



316 

fers from the Special Disbursement Account on the basis of a reason- 
able estimate of such expenses. 

(j) TJie Special Disbursement Account shall be terminated in the 
event of the liquidation of the Fund and may be terminated prior to 
liquidation of the Fund by a seventy percent majority of the total vot- 
ing power. Upon termination of the account because of the liquidation 
of the Fund, any assets in this account shall be distributed in accord- 
ance with the provisions of Schedule K. Upon termination prior to 
liquidation of the Fund, any assets in this account shall be transferred 
to the General Resources Account for immediate use in operations and 
transactions. The Fund, by a seventy percent majority of the total vot- 
ing power, shall adopt rules and regulations for the administration of 
the Special Disbursement Account. 

Article VI — Capital Transfers 



TRANSFERS 

(a) A member may not use the Fund's general resources to meet a 
large or sustained outflow of capital except as provided in Section 2 
of this Article, and the Fund may request a member to exercise con- 
trols to prevent such use of the general resources of the Fund. If, after 
receiving such a request, a member fails to exercise appropriate con- 
trols, the Fund may declare the member ineligible to use the general 
resources of the Fund. 

( b ) Nothing in this section shall be deemed ; 

(i) to prevent the use of the general resources of the Fund for 
capital transactions of reasonable amount required for the expan- 
sion of exports or in the ordinary course of trade, banking or 
other business[J; or 

(ii) to affect capital movements which are met out of a mem- 
ber's own resources [of gold and foreign exchange,] but members 
undertake that such capital movements will be in accordance with 
the [purpose] purposes of the Fund. 

SECTION 2. SPECIAL PROVISIONS FOR CAPITAL TRANSFERS 

A member shall be entitled to make [gold] reserve tranche pur- 
chases to meet capital transfers. 

SECTION 3. CONTROLS OF CAPPTAL TRANSFERS 

Members may exercise such controls as are necessary to regulate 
international capital movements, but no member may exercise these 
controls in a manner which will restrict payments for current trans- 
actions or which will unduly delay transfers of funds in settlement 
of commitments, except as provided in Article VII, Section 3(5) , and 
in Article XIV, Section 2. 

Article VII — Replenishment and Scarce Currencies 

SECTION [1] 2. GENERAL SCARCITY OF CURRENCY 

If the Fund finds that a general scarcity of a particular currency is 
developing, the Fund may so inform members and may issue a report 



317 

setting forth the causes of the scarcity and containing recommenda- 
tions designed to bring it to an end. A representative of the member 
whose currency is involved shall participate in the preparation of the 
report. 

SECTION [2] 1. MEASURES TO REPLEXISH THE FUXD's HOLDINGS OF 
SCARCE CURRENCIES 

The Fund may, if it deems such action appropriate to replenish 
its holdings of any member's currency in the General Resources 
Account needed in connection with its transactions, take either or both 
of the following steps : 

(i) Propose to the member that, on terms and conditions agreed 
between the Fund and the member, the latter lend its currency 
to the Fund or that, with the [approval] concurrence of the mem- 
ber, the Fund borrow such currency from some other source either 
within or outside the territories of the member, but no member 
shall be under any obligation to make such loans to the Fund or 
to [approve] concur the borrowing of its currency by the Fund 
from any other source. 

[(ii) Require the member to sell its currency to the Fund for 

SOW;! 

(ii) Require the member, if it is a participant, to sell its cur- 
rency to the Fund for special drawing rights held in the General 
Resources Account, subject to Article XIX, Section 4- In replen- 
ishing with special drawing rights, the Fund shall pay due regard 
to the principles of designation under Article ^VIX, Section 5. 

SECTION 3. SCARCITY OF THE FUND'S HOLDINGS 

(a) If it becomes evident to the Fund that the demand for a 
member's currency seriously threatens the Fund's ability to supply 
that currency, the Fund, whether or not it has issued a report under 
Section [1] 2 of this Article, shall formally declare such currency 
scarce and shall thenceforth apportion its existing and accruing 
supply of the scarce currency with due regard to the relative needs of 
members, the general international economic situation and any other 
pertinent considerations. The Fund shall also issue a report con- 
cerning its action. 

(b) A formal declaration under (a) above shall operate as an au- 
thorization to any member, after consultation with the Fund, tem- 
porarily to impose limitations on the freedom of exchange operations 
in the scarce currency. Subject to the provisions of Article IV, [Sec- 
tions 3 and 4] and Schedule C, the member shall have complete juris- 
diction in determining the nature of such limitations, but they shall be 
no more restrictive than is necessary to limit the demand for the scarce 
currency to the supply held by, or accruing to, the member in ques- 
tion^], aR d they shall be relaxed and removed as rapidly as condi- 
tions permit. 

(c) The authorization under (b) above shall expire whenever the 
Fund formally declares the currency in question to be no longer scarce. 



318 

SECTION 4. ADMINISTRATION OF RESTRICTIONS 

Any member imposing restrictions in respect of the currency of any 
other member pursuant to the provisions of Section 3 (b) of this Article 
shall give sympathetic consideration to any representations by the 
other member regarding the administration of such restrictions. 

SECTION 5. EFFECT OF OTHER INTERNATIONAL AGREEMENTS ON 

RESTRICTIONS 

Members agree not to invoke the obligations of any engagements 
entered into with other members prior to this Agreement in such a 
manner as will prevent the operation of the provisions of this Article. 

Article VIII — General Obligations of Members 

SECTION 1. INTRODUCTION 

In addition to the obligations assumed under other articles of this 
Agreement, each member undertakes the obligations set out in this 
Article. 

SECTION 2. AVOIDANCE OF RESTRICTIONS ON CURRENT PAYMENTS 

(a) Subject to the provisions of Article VII, Section 3(6) , and Ar- 
ticle XIV, Section 2, no member shall, without the approval of the 
Fund, impose restrictions on the making of payments and transfers 
for current international transactions. 

(b) Exchange contracts which involve the currency of any member 
and which are contrary to the exchange control regulations of that 
member maintained or imposed consistently with this Agreement 
shall be unenforceable in the territories of any member. In addition, 
members may, by mutual accord, cooperate in measures for the purpose 
of making the exchange control regulations of cither member more 
effective, provided that such measures and regulations arc consistent 
with this Agreement. 

SECTION 3. AVOIDANCE OF DISCRIMINATORY CURRENCY PRACTICES 

No member shall engage in, or permit any of its fiscal agencies re- 
ferred to in Article V, Section 1, to engage in, any discriminatory 
currency arrangements or multiple currency practices, whether within 
or outside margins under Article IV or prescribed by or under Sched- 
ule C, except as authorized under this Agreement or approved by the 
Fund. If such arrangements and practices are engaged in at the date 
when this Agreement enters into force, the member concerned shall 
consult with the Fund as to their progressive removal unless they are 
maintained or imposed under Article XIV, Section 2, in which case 
the provisions of Section[4] 3 of that Article shall apply. 

SECTION 4. CONVERTIBILITY OF FOREIGN HELD BALANCES 

(a) Each member shall buy balances of its currency held by another 
member if the latter, in requesting the purchase, represents 



319 

(i) that the balances to be bought have been recently acquired 
as a result of current transactions; or 

(ii) that their conversion is needed for making payments for 
current transactions. 
The buying member shall have the option to pay either in special 
drawing rights, subject to Article XIX, Section 4, or in the currency 
of the member making the request [or in gold]. 

(b) The obligation in (a) above shall not apply 

(i) when the convertibility of the balances has been restricted 
consistently with Section 2 of this Article, or Article VI, Section 
3; |or] 

(ii) when the balances have accumulated as a result of trans- 
actions effected before the removal by a member of restrictions 
maintained or imposed under Article XIV, Section 2 ; [or] 

(iii) [when] the balances have been acquired contrary to the 
exchange regulations of the member which is asked to buy them ; 
[or] 

(iv) [when] the currency of the member requesting the pur- 
chase has been declared scarce under Article VII, Section 3(a) ; 
or 

(v) [when] the member requested to make the purchase is for 
any reason not entitled to buy currencies of other members from 
the Fund for its own currency. 

SECTION B. FURNISHING OF INFORMATION 

(a) The Fund may require members to furnish it with such infor- 
mation as it deems necessary for its [operations] activities, including, 
as the minimum necessary for the effective discharge of the Fund's 
duties, national data on the following matters : 

(i) Official holdings at home and abroad, of (1) gold, (2) 
foreign exchange. 

(ii) Holdings at home and abroad by banking and financial 
agencies, other than official agencies, of (1) gold, (2) foreign 
exchange. 

(iii) Production of gold. 

(iv) Gold exports and imports according to countries of desti- 
nation and origin. 

(v) Total exports and imports of merchandise, in terms of 
local currency values, according to countries of destination and 
origin. 

(vi) International balance of payments, including (1) trade 
in goods and services, (2) gold transaction, (3) known capital 
transactions, and (4) other items. 

(vii) International investment position, i.e., investments within 
the territories of the member owned abroad and investments 
abroad owned by persons in its territories so far as it is possible 
to furnish this information. 

(yiii) National income. 

(ix) Price indices, i.e., indices of commodity prices in whole- 
sale and retail markets and of export and import prices. 

(x) Buying and selling rates for foreign currencies. 

(xi) Exchange controls, i.e.. a comprehensive statement of 
exchange controls in effect at the time of assuming membership 
in the Fund and details of subsequent changes as they occur. 



320 

(xii) Where official clearing arrangements exist, details of 
amounts awaiting clearance in respect of commercial and financial 
transactions, and of the length of time during which such arrears 
have been outstanding. 

(b) In requesting information the Fund shall take into considera- 
tion the varying ability of members to furnish the data requested. 
Members shall be under no obligation to furnish information in such 
detail that the affairs of individuals or corporations are disclosed. 
Members undertake, however, to furnish the desired information in as 
detailed and accurate a manner as is practicable, and, so far as possible, 
to avoid mere estimates. 

(c) The Fund may arrange to obtain further information by agree- 
ment with members. It shall act as a centre for the collection and 
exchange of information on monetary and financial problems, thus 
facilitating the preparation of studies designed to assist members in 
developing policies which further the purposes of the Fund. 

SECTION 6. CONSULTATION BETWEEN MEMBERS REGARDING EXISTING 
INTERNATIONAL AGREEMENTS 

Where under this Agreement a member is authorized in the special 
or temporary circumstances specified in the Agreement to maintain or 
establish restrictions on exchange transactions, and there are other 
engagements between members entered into prior to this Agreement 
which conflict with the application of such restrictions, the parties to 
such engagements [will] shall consult with one another with a view 
to making such mutually acceptable adjustments as may be necessary. 
The provisions of this Article shall be without prejudice to the opera- 
tion of Article VII, Section 5. 

SECTION 7. OBLIGATION TO COLLABORATE REGARDING POLICIES ON 

RESERVE ASSETS 

Each member undertakes to collaborate with the Fund and icith 
other members in order to ensure that the policies of the member with 
respect to reserve assets shall be consistent with the objectives of pro- 
moting better international surveillance of international liquidity and 
making the special draiving right the principal reserve asset in the 
international monetary system. 

Article IX — Status, Immunities and Privileges 

SECTION 1. PURPOSES OF ARTICLE 

To enable the Fund to fulfill the functions with which it is entrusted, 
the status, immunities and privileges set forth in this Article shall be 
accorded to the Fund in the territories of each member. 

SECTION 2. STATUS OF THE FUND 

The fund shall possess full juridical personality, and, in particular," 
the capacity : 

(i) to contract; s 

(ii ) to acquire and dispose of immovable and movable property ; 
and 

(iii) to institute legal proceedings. 



321 

SECTION 3. IMMUNITY FROM JUDICIAL PROCESS 

The Fund, its property and its assets, wherever located and by 
whomsoever held, shall enjoy immunity from every form of judicial 
process except to the extent that it expressly waives its immunity for 
the purpose of any proceedings or by the terms of any contract. 

SECTION 4. IMMUNITY FROM OTHER ACTION 

Property and assets of the Fund, wherever located and by whom- 
soever held, shall bo immune from search, requisition, confiscation, 
expropriation or any other form of seizure by executive or legislative 
action. 

SECTION 5. IMMUNITY OF ARCHIVES 

The archives of the Fund shall be inviolable. 

SECTION G. FREEDOM OF ASSETS FROM RESTRICTIONS 

To the extent necessary to carry out the operations provided for in 
this Agreement, all property and assets of the Fund shall be free from 
restrictions, regulations, controls and moratoria of any nature. 

6ECTION 7. PRIVILEGE FOR COMMUNICATIONS 

The official communications of the Fund shall be accorded by 
members the same treatment as the official communications of other 
members. 

SECTION 8. IMMUNITIES AND PRIVILEGES OF OFFICERS AND EMPLOYEES 

All governors, executive directors, alternates members of commit- 
tees, representatives appointed under Article XII, Section 3(j), ad- 
visors of any of the foregoing persons, officers and employees of the 
Fund: < 

(i) shall be immune from legal process with respect to acts 
performed by them in their official capacity except when the 
Fund waives this immunity. 

(ii) not being local nationals, shall be granted the same im- 
munities from immigration restrictions, alien registration re- 
quirements and national service obligations and the same facili- 
ties as regards exchange restrictions as are accorded by members 
to the representatives, officials, and employees of comparable rank 
of other members, and 

(iii) shall be granted the same treatment in respect of traveling 
facilities as is accorded by members to representatives, officials, 
and employees of comparable rank of other members. 

SECTION 9. IMMUNITIES FROM TAXATION 

(a) The Fund, its assets, property, income and its operations and 
transactions authorized by this Agreement, shall be immune from all 
taxation and from all customs duties. The Fund shall also be immune 
from liability for the collection or payment of any tax or duty. 



322 

(b) No tax shall be levied on or in respect of salaries and emolu- 
ments paid by the Fund to executive directors, alternates, officers or 
employees of the Fund who are not local citizens, local subjects, or 
other local nationals. 

(c) No taxation of any kind shall be levied on any obligation or 
security issued by the Fund, including any dividend or interest thereon, 
by whomsoever held 

(i) which discriminates against such obligation or security 
solely because of its origin ; or 

(ii) if the sole jurisdictional basis for such taxation is the place 
or currency in which it is issued, made payable or paid, or the 
location of any office or place of business maintained by the Fund. 

SECTION 10. APPLICATION OF ARTICLE 

Each member shall take such action as is necessary in its own terri- 
tories for the purpose of making effective in terms of its own law the 
principles set forth in this Article and shall inform the Fund of the 
detailed action which it has taken. 

Article X — Relations With Other International Organizations 

The Fund shall cooperate within the terms of this Agreement with 
any general international organization and with public international 
organizations having specialized responsibilities in related fields. Any 
arrangements for such cooperation which would involve a modifica- 
tion of any provision of this Agreement may be effected onlv after 
amendment to this Agreement under Article [XVII] XVIII, 

Article XI — Relations With Non-IMember Countries 

SECTION 1. UNDERTAKINGS REGARDING RELATIONS WITH NON-MEMBER 

COUNTRIES 

Each member undertakes: 

(i) Not to engage in, nor to permit any of its fiscal ngencics 
referred to in Article V, Section 1, to engage in, any transactions 
with a non-member or with persons in a non-member's territories 
which would be contrary to the provisions of this Agreement or 
the purposes of the Fund; 

(ii) Not to cooperate with a non -member or with persons in a 
non-member's territories in practices which would be contrary to 
the provisions of this Agreement or the purposes of the Fund; 
and 

(iii) To cooperate with the Fund with a view to the applica- 
tion in its territories of appropriate measures to prevent trans- 
actions with non-members or with persons in their territories 
which would be contrary to the provisions of this Agreement or 
the purposes of the Fund. 

SECTION 2. RESTRICTIONS ON TRANSACTIONS WITH NON-MEMBER COUNTRIES 

Nothing in this Agreement shall affect the right of any member to 
impose restrictions on exchange transactions with non-members or with 
persons in their territories unless the Fund finds that such restrictions 



323 

prejudice the interests of members and are contrary to the purposes 
of the Fund. 

Article XII — Organization and Management 

SECTION 1. STRUCTURE OF THE FUND 

The Fund shall have a Board of Governors, Executive [Directors] 
Board, a Managing Director and a staff, and a Council if the Board of 
Governor* decides, by an eighty- fi re percent majority of the total 
voting power, that the provisions of Schedule D shall be applied. 

SECTION 2. BOARD OF GOVERNORS 

1(a) All powers of the Fund shall be vested in the Board of Gov- 
ernors, consisting of one governor and one alternate appointed by 
each member in such manner as it may determine. Each governor 
and each alternate shall serve for five years, subject to the pleasure of 
the member appointing him, and may be reappointed. No alternate 
may vote except in the absence of his principal. The Board shall select 
one of the governors as chairman.] 

(a) All powers under this Agreement not conferred directly on 
the Board of Governors, the Executive Board, or the Managing Direc- 
tor shall be vested in the Board of Governors. The Board of Gover- 
nors shall consist of one Governor and one Alternate appointed by 
each m ember in such manner as it may determine. Each Governor and 
each Alternate shall serve until a new appointment is made. No Alter- 
nate may vote except in the absence of his principal. The Board of 
Governors shall select one of the Governors as chairman. 

1(b) The Board of Governors may delegate to the Executive Direc- 
tors authority to exercise any powers of the Board, except the power 
to: 

(i) Admit new members and determine the conditions of their 
admission. 

(ii) Approve a revision of quotas, or to decide on the pay- 
ment, or on the mitigation of the effects of payment, of increases 
in quotas proposed as the result of a general review of quotas. 

(iii) Approve a uniform change in the par values of the cur- 
rencies of all members, or to decide when such a change is made 
that the provisions relating to the maintenance of gold value of 
the Fund's assets shall not apply. 

(iv) Make arrangements to cooperate with other international 
organizations (other than informal arrangements of a temporary 
or administrative character). 

(v) Determine the distribution of the net income of the Fund, 
(vi) Require a member to withdraw, 
(vii) Decide to liquidate the Fund. 

(viii) Decide appeals from interpretations of this Agreement 
given by the Executive Directors. 

(ix) Revise the provisions on repurchase or to revise and sup- 
plement the rules for the distribution of repurchases among types 
of reserves. 



324 

(x) Make transfers to general reserve from any special reserve. J 

(b) The Board of Governors may delegate to the Executive Board 
authority to exercise any powers of the Board of Governors, except 
the powers conferred directly by this Agreement on the Board of 
Governors. 

[(c) The Board of Governors shall hold an annual meeting and 
such other meetings as may be provided for by the Board or called 
by the Executive Directors. Meetings of the Board shall be called 
by the Directors whenever requested by five members or by members 
having one quarter of the total voting power.] 

(c) The Board of Governors shall hold such meetings as may be pro- 
vided for by the Board of Governors or called by the Executive Board. 
Meetings of the Board of Governors shall be called whenever requested 
by fifteen members or by members having one-quarter of the total 
voting power. 

(d) A quorum for any meeting of the Board of Governors shall 
be a majority of the governors [exercising] having not less than two- 
thirds of the total voting power. 

(e) Each governor shall be entitled to cast the number of votes 
allotted under Section 5 of this Article to the member appointing him. 

(/) The Board of Governors may by regulation establish a pro- 
cedure whereby the Executive [Directors, when they deem] Board, 
when it deems such action to be in the best interests of the Fund, may 
obtain a vote of the governors on a specific question without calling a 
meeting of the Board of Governors. 

(g) The Board of Governors, and the Executive [Directors] Board 
to the extent authorized, may adopt such rules and regulations as may 
be necessary or appropriate to conduct the business of the Fund. 

(h) Governors and alternates shall serve as such without compensa- 
tion from the Fund, but the Fund shall pay them reasonable expenses 
incurred in attending meetings. 

(i) The Board of Governors shall determine the remuneration to 
be paid to the Executive Directors and their Alternates and the salary 
and terms of the contract of service of the Managing Director. 

(j) The Board of Governors and the Executive Board may appoint 
such committtes as they deem advisable. Membership of committees 
need not be limited to Governors or Executive Directors or their 
Alternates. 

SECTION 3. EXECUTIVE [DIRECTORS] BOARD 

(a) The Executive [Directors] Board shall be responsible for [the 
conduct of the general operations] conducting the business of the 
Fund, and for this purpose shall exercise all the powers delegated to 
them by the Board of Governors. 

[(&) There shall be not less than twelve directors who need not be 
governors, and of whom 

(i) Five shall be appointed by the five members having the 
largest quotas ; 

(ii) Not more than two shall be appointed when the provisions 
of (c) below apply ; 

(lii) Five shall be elected by the members not entitled to ap- 
point directors, other than the American Republics ; and 



325 

(iv) Two shall be elected by the American Republics not en- 
titled to appoint directors. 
For the purposes of this paragraph, members means governments 
of countries whose names are set forth in Schedule A, whether they 
become members in accordance with Article XX or in accordance 
with Article II, Section 2. When governments of other countries 
become members, the Board of Governors may, by a four-fifths major- 
ity of the total voting power, increase the number of directors to be 
elected.] 

(b) The Executive Board shall consist of Executive Directors with 
the Managing Director as chairman. Of the Executive Directors: 

(i) five shall be appointed by the five members having the 

largest quotas; and 

(ii) fifteen shall be elected by the other members. 
For the purpose of each regular election of Executive Directors, the 
Board of Governors, by an eighty-five percent majority of the total 
voting power, may increase or decrease the number of Executive Di- 
rectors in (ii) above. The number of Executive Directors in (ii) above 
shall be reduced by one or two, as the case may be, if Executive Direc- 
tors are appointed under (c) below, unless the Board of Governors 
decides, by an eighty-five percent majority of the total voting power, 
that this reduction, would hinder the effective discharge of the func- 
tions of the Executive Board or of Executive Directors or would 
threaten to upset a desirable balance in the Executive Board. 

(c) If, at the second regular election of [directors] Extent ire Di- 
rectors and thereafter, the members, entitled to appoint [directors] 
Executive Directors under (b) (i) above do not include the two mem- 
bers, the .holdings of whose currencies by the Fund in the General 
Resources Account have been, on the average over the preceding two 
years, reduced below their quotas by the largest absolute amounts in 
terms of [gold as a common denominator] the special draining right, 
either one or both of such members, as the case may be, [shall be 
entitled to appoint a director] may appoint an Executive Director. 

\.(d) Subject to Article XX, Section ?>(b) elections of elective 
directors shall be conducted at intervals of two years in accordance 
with the provisions of Schedule C, supplemented by such regulations 
as the Fund deems appropriate. Whenever the Board of Governors 
increases the number of directors to be elected under (b) above, it 
shall issue regulations making appropriate changes in the proportion 
of votes required to elect directors under the provisions of Schedule 
C] 

(d) Elections of elective Executive Directors shall be conducted at 
intervals of two years in accordance with the provisions of Schedule 
E, supplemented by such regulations as the Fund deems appropriate. 
For each regular election of Executive Directors, the Board of Gover- 
nors may issue regulations making changes in the proportion of votes 
required to elect Executive Directors under the provisions of Schedule 
E . 

(e) Each Executive director shall appoint an alternate with full 
power to act for him when he is not present. When the Executive 
directors appointing them are present, alternates may participate in 
meetings but may not vote. 

(/) Executive Directors shall continue in office until their succes- 
sors are appointed or. elected. If the office of an elected Executive 



326 

director becomes vacant more than ninety days before the end of his 
term, another Executive director shall be elected for the remainder of 
the term by the members [who] that elected the former Executive 
director. A majority of the votes cast shall be required for election. 
While the office remains vacant, the alternate of the former Executive 
director shall exercise his powers, except that of appointing an 
alternate. 

(g) The Executive [Directors] Board shall function in continuous 
session at the principal office of the Fund and shall meet as often as 
the business of the Fund may require. 

(h) A quorum for any meeting of the Executive [Directors] Board 
shall be a majority of the [directors representing] Executive Direc- 
tors having not less than one-half of the total voting power. 

(i) (i) Each appointed Executive director shall be entitled to cast 
the number of votes allotted under Section 5 of this Article to the 
member appointing him. [Each elected director shall be entitled to 
cast the number of votes which counted towards his election. When 
the provisions of Section 5(b) of this Article are applicable, the votes 
which a director would otherwise be entitled to cast shall be increased 
or decreased correspondingly. All the votes which a director is entitled 
to cast shall be cast as a unit.] 

(ii) If the votes allotted to a member that appoints an Executive 
Director under (c) above were cast by an Executive Director together 
with the votes allotted to other members as a result of the last regular 
election of Executive Directors, the member may agree with each of 
the other members that the number of votes allotted to it shall be cast 
by the appointed Executive Director. A member making such an 
agreement shall not participate in the election of Executive Directors. 

(Hi) Each elected Executive Director shall be entitled to cast the 
number of votes which counted towards his election. 

(iv) When the provisions of Section 5(b) of this Article are appli- 
cable, the votes which an Executive Director woidd otherwise be en- 
titled to cast shall be increased or decreased correspondingly. All the 
votes which an Executive Director is entitled to cast shall be cast as 
a unit. 

(j) The Board of Governors shall adopt regulations under which 
a member not entitled to appoint [a director] an Executive Director 
under (b) above may send a representative to attend any meeting of 
the Executive [Directors] Board when a request made by, or a matter 
particularly affecting, the member is under consideration. 

[(&) The Executive Directors may appoint such committee as 
they deem advisable. Membership of committees need not be limited to 
governors or directors or their alternates.] 

SECTION 4. MANAGING DIRECTOR AND STAFF 

(a) The Executive [Directors] Board shall select a Managing Di- 
rector who shall not be a governor or an executive director. The Man-" 
aging Director shall be chairman of the Executive [Directors] Board, 
but shall have no vote except a deciding vote in case of an equal divi- 
sion. He may participate in meetings of the Board of Governors, but 
shall not vote at such meetings. The Managing Director shall cease 
to hold office when the Executive [Directors] Board so decide. 



327 

(b) The Managing Director shall be chief of the operating staff of 
the Fund and shall conduct, under the direction of the Executive [Di- 
rectors] Board, the ordinary business of the Fund. Subject to the 
general control of the Exective [Directors] Board, he shall be re- 
sponsible for the organization, appointment and dismissal of the staff 
of the Fund. 

(c) The Managing Director and the staff of the Fund, in the dis- 
charge of their functions, shall owe their duty entirely to the Fund 
and to no other authority. Each member of the Fund shall respect 
the international character of this duty and shall refrain from all at- 
tempts to influence any of the staff in the discharge of [his] these 
functions. 

(d) In appointing the staff the Managing Director shall, subject to 
the paramount importance of securing the highest standards of effi- 
ciency and of technical competence, pay due regard to the importance 
of recruiting personnel on as wide a geographical basis as possible. 

SECTION 5. VOTING 

(a) Each member shall have two hundred fifty votes plus one ad- 
ditional vote for each part of its quota equivalent to one hundred 
thousand [United States dollars] special drawing rights. 

(b) Whenever voting is required under Article V, Section 4 or 5, 
each member shall have the number of votes to which it is entitled 
under (a) above, adjusted: 

(i) by the addition of one vote for the equivalent of each four 

hundred thousand [United States dollars] special drawing rights 

of net sales of its currency up to the date when the vote is taken, or 

(ii) by the subtraction of one vote for the equivalent of each 

four hundred thousand [United States dollars] special drawing 

rights of its net purchases [of the currencies of other members] 

under Article T\ Section 3(b) and (/) up to the date when the 

vote is taken 

provided, that neither net purchases nor net sales shall be deemed at 

any time to exceed an amount equal to the quota of the member 

involved. 

[(c) For the purpose of all computations under this Section, United 
States dollars shall be deemed to be of the weight and fineness in ef- 
fect on July 1, 1944, adjusted for any uniform change under Article 
IV, Section 7, if a waiver is made under Section 8(d) of that Article.] 
[(r/)] (c) Except as otherwise specifically provided, all decisions 
of the Fund shall be made by a majority of the votes cast. 

SECTION 6. RESERVES AND DISTRIBUTION OF NET INCOME, AND IXYESTMENT 

[(«) The Board of Governors shall determine annually what part 
of the Fund's net income shall be placed to reserve and what part, 
if any, shall be distributed. 

[(£>) If any distribution is made of the net income of any year, there 
shall first be distributed to members eligible to receive remuneration 
under Article V, Section 9, for that year an amount by which two per- 
cent per annum exceeded any remuneration that has been paid for 
that year. Any distribution of the net income of that year beyond that 



328 

amount shall be made to all members in proportion to their quotas. 
Payments to each member shall be made in its own currency. 

[(c) The Fund may make transfers to general reserve from any 
special . reserve. J 

(a) The Fund shall determine annually what part of its net income 
shall be placed to general reserve or special reserve, and what part, if 
any, shall be distributed. 

(b) The Fund may use the special reserve for any purpose for which 
it may use the general reserve, except distribution. 

(c) If any distribution is made of the net income of any year, it shall 
be made to all members in proportion to their quotas. 

(d) The Fund, by a seventy percent majority of the total voting 
power, may decide at any time to distribute any part of the general 
reserve. Any such distribution shall be made to all members in propor- 
tion to their quotas. 

(e) Payments under (c) and (d) above shall be made in special 
drawing rights, provided that either the Fund or the member may de- 
cide that the payment to the member shall be made in its own currency. 

(f) (i) The Fund may establish an Investment Account for the 
purposes of this subsection (/). The assets of the Investment Account 
shall be held separately from the other accounts of the General 
Department. 

(ii) The Fund may decide to transfer to the Investment Ac- 
count a part of the proceeds of the sale of gold in accordance with 
Article F, Section 12(g) and, by a seventy percent majority of the 
total voting power, may decide to transfer to the Investment 
Account, for immediate investment, currencies held in the Gen- 
eral Resources Account. The amount of these transfers shall not 
exceed the total amount of the general reserve and the special 
reserve at the time of the decision. 

(Hi) The Fund may invest a members currency held in the 
Investment Account in marketable obligations of that member or 
in marketable obligations of international financial organizations. 
No investment shall be made without the concurrence of the mem- 
ber whose currency is used to make the investment. The Fund 
shall invest only in obligations denominated in special drawing 
rights or in the currency used for investment. 

(iv) The income of investment may be invested in accordance 
with the provisions of this subsection (/). Income not invested 
shall be held in the Investment Account or may be used for meet- 
ing the expenses of conducting the business of the Fund. 

(v) The Fund may use a member's currency held in the Invest- 
ment Account to obtain the currencies needed to meet the expenses 
of conducting the business of the Fund. 
' (vi) The Investment Account shall be terminated in the event 
of liquidation of the Fund and may be terminated, or the amount 
of the investment may be reduced, prior to liquidation of the 
Fund by a seventy percent majority of the total voting power. 
The Fund, by a seventy percent majority of the total voting 
power, shall adopt rules and regulations regarding administra- 
tion of the Investment Account, which shall be consistent with 
(vii), (viii),and (ix) below. 

(vii) Upon termination of the Investment Account because 
of liquidation of the Fund, any assets in this account shall be dis- 



329 

tributed in accordance with the provisions of Schedule K, pro- 
vided that a portion of these assets corresponding to the propor- 
tion of the assets transferred to this account under Article V, Sec- 
tion 12 (g) to the total of the assets transferred to this account 
shall be deemed to be assets held in the Special Disbursement Ac- 
count and shall be distributed in accordance with Schedule K, 
paragraph 2(a) (ii). 

(viii) Upon termination of the Investment Account prior to 
liquidation of the Fund, a portion of the assets held in this 
account corresponding to the proportion of the assets transfewed 
to this account under Article V, Section 12(g) to the total of the 
assets transferred to the account shall be transferred to the Special 
Disbursement Account if it has not been terminated, arid the 
balance of the assets held in the Investment Account shall be 
transferred to the General Resources Account for immediate use 
in operations and transactions. 

(ix) On a reduction of the amount of the investment by the 
Fund, a portion of the reduction corresponding to the proportion 
of the assets transferred to the Investment Account under Article 
V, Section 12(g) to the total of the assets transfewed to this 
account shall be transferred to the Special Disbursement Account 
if it has not been terminated, and the balance of the reduction 
shall be transferred to the General Resources Account for immedi- 
ate use in operations and transactions. 

SECTION 7. PUBLICATION OF REPORTS 

(a) The Fund shall publish an annual report containing an audited 
statement of its accounts, and shall issue, at intervals of three months 
or less, a summary statement of its operations and transactions and its 
holdings of special drawing rights, gold and currencies of members. 

(b) The Fund may publish such other reports as it deems desirable 
for carrying out its purposes. 

SECTION 8. COMMUNICATION OF VIEWS TO MEMBERS 

The Fund shall at all times have the right to communicate its views 
informally to any member on any matter arising under this Agree- 
ment. The Fund may, by a [two-thirds] seventy percent majority of 
the total voting power, decide to publish a report made to a member 
regarding its monetary or economic conditions and developments 
which directly tend to produce a serious disequilibrium in the inter- 
national balance of payments of members. If the member is not 
entitled to appoint an executive director, it shall be entitled to rep- 
resentation in accordance with Section 3(j) of this Article. The Fund 
shall not publish a report involving changes in the fundamental 
structure of the economic organization of members. 

Article XIII — Offices and Depositories 

SECTION 1. LOCATION OF OFFICES 

The principal office of the Fund shall be located in the territory of 
the member having the largest quota, and agencies or branch offices 
may be established in the territories of other members. 

20-039 O - 78 - 22 



330 



SECTION 2. DEPOSITORIES 



(a) Each member country shall designate its central bank as a de- 
pository for all the Fund's holdings of its currency, or if it has no 
central bank it shall designate such other institution as may be 
acceptable to the Fund. 

(b) The Fund may hold other assets, including gold, in the deposi- 
tories designated by the five members having the largest quotas and 
in such other designated depositories as the Fund may select. Initi- 
ally, at least one-half of the holdings of the Fund shall be held in the 
depository designated by the member in whose territories the Fund 
has its principal office and at least forty percent shall be held in the 
depositories designated by the remaining four members referred to 
above. However, all transfers of gold by the Fund shall be made with 
due regard to the costs of transport and anticipated requirements of 
the Fund. In an emergency the Executive [Directors] Board may 
transfer all or any part of the Fund's gold holdings to any place where 
they can be adequately protected. 



Each member guarantees all assets of the Fund against loss result- 
ing from failure or default or on the part of the depository designated 
by it. 

Article XIV — Transitional [Period] Arrangements 

[SECTION 1. INTRODUCTION 

[The Fund is not intended to provide facilities for relief or recon- 
struction or to deal with international indebtedness arising out of tho 
war.] 

SECTION 1. NOTIFICATION TO THE FUND 

Each member shall notify the Fund whether it intends to avail it- 
self of the transitional arrangements in Section 2 of this Article^ or 
whether it is prepared to accent the obligations of Article VIII, Sec- 
tions #, 3, and 4- A member availing itself of the transitional ai^range- 
ments shall notify the Fund as soon thereafter as it is prepared to 
accept these obligations. 

SECTION 2. EXCHANGE RESTRICTIONS 

[In the post-war transitional period members] A member that has 
notified the Fund that it intends to avail itself of transitional arrange- 
ments under this provision may, notwithstanding the provisions of 
any other articles of this Agreement, maintain and adapt to changing 
circumstances [(and, in the case of members whose territories have 
been occupied by the enemy, introduce where necessary)] the restric- 
tions on payments and transfers for current international transactions 
that were in effect on the date on which it became a member. Members 
shall, however, have continuous regard in their foreign exchange 
policies to the purposes of the Fund ; and, as soon as conditions permit, 
they shall take all possible measures to develop such commercial and 
financial arrangements with other members as will facilitate inter- 
national payments and the [maintenance of exchange stability] pro- 
motion of a stable system of exchange rates. In particular, members 



331 

shall withdraw restrictions maintained [or imposed] under this Sec- 
tion as soon as they are satisfied that they will be able, in the absence 
of such restrictions, to settle their balance of payments in a manner 
which will not unduly encumber their access to the general resources 
of the Fund. 

[SECTION" 3. NOTIFICATION TO THE FUND 

[Each member shall notify the Fund before it becomes eligible 
under Article XX, Section 4(c) or (<7), to buy currency from the 
Fund, whether it intends to avail itself of the transitional arrange- 
ments in Section 2 of this Article, or whether it is prepared to accept 
the obligations of Article VIII. Sections 2. 3, and 4. A member avail- 
ing itself of the transitional arrangements shall notify the Fund as 
soon thereafter as it is prepared to accept the above-mentioned 
obligations.] 

SECT/OX 3. ACTIOS OF THE FUND RELATING TO RESTRICTIONS 

The Fund shall make annual reports on the restrictions in force 
under Section 2 of this Article. Any member retaining any restrictions 
inconsistent with Article TV//. Section* 2. J. or 4 shall consult the 
Fund annually as to their further intention. The Fund may. if it 
deems such action necessary in exceptional circumstances, make rep- 
resentations to any ynember that conditions are favorable for the 
withdrawal of any particular restriction, or for the general abandon- 
ment of restrictions, inconsistent with the provisions of any other 
articles of this Agreement. The member shall be given a suitable time 
to reply to such representations. If the Fund finds that the member 
persists in maintaining restrictions which arc inconsistent with the 
purposes of the Fund, the member shall be subject to Article A\YTY, 
Section 2(a). 

[SECTION 4. ACTION OF THE FUND RELATING TO RESTRICTIONS 

[Not later than three years after the date on which the Fund begins 
operations and in each year thereafter, the Fund shall report on the 
restrictions still in force under Section 2 of this Article. Five years 
after the date on which the Fund begins operations, and in each year 
thereafter, any member still retaining any restrictions inconsistent 
with Article VIII, Section 2, 3, or 4, shall consult the Fund as to their 
further retention. The Fund may, if it deems such action necessary 
in exceptional circumstances, make representations to any member 
that conditions are favorable for the withdrawal of any particular 
restrictions, or for the general abandonment of restrictions, inconsist- 
ent with the provisions of any other articles of this Agreement. The 
member shall be given a suitable time to reply to such representations. 
If the Fund finds that the member persists in maintaining restrictions 
which are inconsistent with the purposes of the Fund, the member 
shall be subject to Article XV, Section 2(a).] 

[SECTION 5. NATURE OF TRANSITIONAL PERIOD 

[In its relations with members; the Fund shall recognize that the 
post-war transitional. period will be one of change and adjustment and 



332 

in making decisions on requests occasioned thereby which are pre- 
sented by any member it shall give the member the benefit of any 
reasonable doubt.] 

Article [XV] XXVI — Withdrawal from Membership 

SECTION 1. RIGHT OF MEMBERS TO WITHDRAW 

Any member may withdraw from the Fund at any time by trans- 
mitting a notice in writing to the Fund at its principal office. With- 
drawal shall become effective on the date such notice is received. 

SECTION 2. COMPULSORY WITHDRAWAL 

(a) If a member fails to fulfill any of its obligations under this 
Agreement, the Fund may declare the member ineligible to use the 
resources of the Fund. Nothing in this Section shall be deemed to 
limit the provisions of [Article IV, Section 6, Article V, Section 5, 
or Article VI, Section 1] Article V, Section 5 or Article VI, Section 
1. 

(b) If, after the expiration of a reasonable period the member per- 
sists in its failure to fulfill any of its obligations under this Agreement, 
[or a difference between a member and the Fund under Article IV, 
Section 6, continues J that member may be required to withdraw from 
membership in the Fund by a decision of the Board of Governors 
carried by a majority of the governors [representing a majority] 
having eighty -five percent of the total voting power. 

(c) Regulations shall be adopted to ensure that before action is 
taken against any member under (a) or (&) above, the member shall 
be informed in reasonable time of the complaint against it and given 
an adequate opportunity for stating its case, both orally and in 
writing. 

SECTION 3. SETTLEMENT OF ACCOUNTS WITH MEMBERS WITHDRAWING 

When a member withdraws from the Fund, normal operations and 
transactions of the Fund in its currency shall cease and settlement of 
all accounts between it and the Fund shall be made with reasonable 
dispatch by agreement between it and the Fund. If agreement is not 
reached promptly, the provisions of Schedule [D] J shall apply to the 
settlement of accounts. 

Article [XVI] XXVII — Emergency Provisions 

SECTION 1. TEMPORARY SUSPENSION * 

(a) In the event of an emergency or the development of unforeseen 

circumstances threatening the [operations] activities of the Fund, the 
Executive [Directors by unanimous vote] Board, by an eighty -fire per- 
cent majo?*ity of the total voting power, may suspend for a period of 
not more than [one hundred twenty days] one year the operation of 
any of the following provisions : 

[(i) Article IV, Sections 3 and 4 (b) 

(ii) Article V, Section 2, 3, 7, 8 (a) and (/) 

(iii) Article VI, Section 2 

(iv) Article XI, Section 1] 



333 

(i) Article V, Sections 2, 3, 7, 8(a)(1) and (e); 
(ii) Article VI, Section 2; 
(Hi) Article XI, Section 1; 
(iv) Schedule C, paragraph 5. 
[(&) Simultaneously with any decision to suspend the operation of 
any of the foregoing provisions, the Executive Directors shall call a 
meeting of the Board of Governors for the earliest practicable date. 
[(c) The Executive Directors may not extend any suspension 
beyond one hundred twenty days. Such suspension may be extended, 
however, for an additional period of not more than two hundred forty 
days, if the Board of Governors by a four-fifths majority of the total 
voting power so decides, but it may not be further extended except by 
amendment of this Agreement pursuant to Article XVII. 

1(d) The Executive Directors may, by a majority of the total 
voting power, terminate such suspension at any time.J 

(b) A suspension of the operation of a provision under (a) above 
may not be extended beyond one year except by the Board of Gover- 
nors which, by an eighty-five percent majority of the total voting 
power, may extend a suspension for an additional period of not more 
than two years if it finds that the emergency or unforeseen circum- 
stances referred to in (a) above continue to exist. 

(c) The Executive Board may, by a majority of the total voting 
power, terminate such suspension at any time. 

(d) The Fund may adopt rules with respect to the subject matter of 
a provision during the period in which its operation is suspended. 

SECTION 2. LIQUIDATION OF THE FUND 

(a) The Fund may not be liquidated except by decision of the 
Board of Governors. In an emergency, if the Executive [DirectorsJ 
Board decide that liquidation of the Fund may be necessary, [they] 
it may temporarily suspend all operations and transactions, pending 
decision by the Board of Governors. 

(b) If the Board of Governors decides to liquidate the Fund, the 
Fund shall forthwith cease to engage in any activities except those 
incidental to the orderly collection and liquidation of its assets and 
the settlement of its liabilities, and all obligations of members under 
this Agreement shall cease except those set out in this Article, in 
[Article XVIII, paragraph (c), in Schedule D, paragraph 7, and in 
Schedule E] Article XXIX (r), in Schedule •/. paragraph 7 and hi 
Schedule K. 

(c) Liquidation shall be administered in accordance with the pro- 
visions of Schedule [E] K. 

Article [XV IT] XXVI f I — Amendments 

(a) Any proposal to introduce modifications in this Agreement, 
whether emanating from a member, a governor or the Executive [Di- 
rectors] Board shall be communicated to the Chairman of the Board 
of Governors who shall bring the proposal before the Board of Gov- 
ernors. If the proposed amendment is approved by the Board of 
Governor* the Fund shall, by circular letter or telegram, ask all mem- 
bers whether they accept the proposed amendment. When three-fifths 
of the members, having [four-fifths] eighty- five percent of the total 
voting power, have accepted the proposed amendment, the Fund shall 
certify the fact by a formal communication addressed to all members. 



334 

(b) Notwithstanding (a) above, acceptance by all members is re- 
quired in the case of any amendment modifying 

(i) the right to withdraw from the Fund (Article [XV J 
XXVI, Section 1) ; 

(ii) the provision that no change in a member's quota shall be 
made without its consent (Article III, Section 2 (d) ; 

(iii) the provision that no change maybe made in the par 
value of a member's currency except on the proposal of that 
member ([Article IV, Section 5 (&)] Schedule C, paragraph 6). 

(c) Amendments shall enter into force for all members three 
months after the date of the formal communication unless a shorter 
period is specified in the circular letter or telegram. 

Article [XVIII] XXIX — Interpretation 

(a) Any question of interpretation of the provisions of this Agree- 
ment arising between any member and the Fund or between any 
members of the Fund shall be submitted to the Executive [Directors] 
Board for [their] its decision. If the question particularly affects any 
member not entitled to appoint an executive director it shall be en- 
titled to representation in accordance with Article XII, Section 3(j). 

(b) In any case where the Executive [Directors have] Board has 
given a decision under (a) above, any member may require, within 
three months from the date of the decision, that the question be 
referred to the Board of Governors, whose decision shall be final. Any 
question referred to the Board of Governors shall be considered by a 
Committee on Interpretation of the Board of Governors. Each Com- 
mittee member shall have one vote. The Board of Governors shall 
establish the membership, procedures, and voting majorities of the 
Committee. A decision of the Committee shall be the decision of the 
Board of Governors unless the Board by an eighty-five percent 
majority of the total voting power decides otherwise. Pending the 
result of the reference to the Board of Governors the Fund may, so 
far as it deems necessary, act on the basis of the decision of the Execu- 
tive [Directors] Board. 

(c) Whenever a disagreement arises between the Fund and a mem- 
ber which has withdrawn, or between the Fund and any member dur- 
ing liquidation of the Fund, such disagreement shall be submitted to 
arbitration by a tribunal of three arbitrators, one appointed by the 
Fund, another by the member or withdrawing member and an umpire 
who, unless the parties otherwise agree, shall be appointed by the 
President of the Permanent Court of International Justice or such 
other authority as may have been prescribed by regulation adopted by 
the Fund. The umpire shall have full power to settle all questions of 
procedure in any case where the parties are in disagreement with 
respect thereto. 

[Article XIX — Explanation of Terms 

[In interpreting the provisions of this Agreement the Fund and its 
members shall be guided by the following : 

[(#) A member's monetary reserves means its official holdings of 
gold, of convertible currencies of other members, and of the currencies 
of such non-members as the Fund may specify. 



335 

£(b) The official holdings of a member means central holdings 
(that is, the holdings of its Treasury, central bank, stabilization fund, 
or similar fiscal agency) . 

[(<?) The holdings of other official institutions or other banks with- 
in its territories may, in any particular case, be deemed by the Fund, 
after consultation with the member, to be official holdings to the extent 
that they are substantially in excess of working balances; provided 
that for the purpose of determining whether, in a particular case, 
holdings are in excess of working balances, there shall be deducted 
from such holdings amounts of currency due to official institutions and 
banks in the territories of members or non-members specified under 
(d) below. 

1(d) A member's holdings of convertible currencies means its hold- 
ings of the currencies of other members which are not availing them- 
selves of the transitional arrangements under Article XIV, Section 2, 
together with its holdings of the currencies of such non-members as 
the Fund may from time to time specify. The term currency for this 
purpose includes without limitation coins, paper money, bank bal- 
ances, bank acceptances, and government obligations issued with a 
maturity not exceeding twelve months. 

I|(e) The sums deemed to be official holdings of other official insti- 
tutions and other bank's under (c) above shall be included in the 
member's monetary reserves. 

[(/) The Fund's holdings of the currency of a member shall 
include any securities accepted by the Fund under Article III, 
Section 5. 

[(g) The Fund, after consultation with a meml>er which is avail- 
ing itself of the transitional arrangements under Article XIV, Section 
2, may deem holdings of the currency of that member which carry 
specified rights of conversion into another currency or into gold to 
be holdings of convertible currency for the purpose of the calcula- 
tion of monetary reserves. 

1(h) For the purpose of calculating gold subscriptions under 
Article III, Section 3, a member's net official holdings of gold and 
United States dollars shall consist of its official holdings of gold and 
United States currency after deducting central holdings of its cur- 
rency by other countries and holdings of its currency by other official 
institutions and other banks if these holdings carry specified rights of 
conversion into gold or United States currency. 

l(i) Payments for current transactions means payments which are 
not for the purpose of transferring capital, and includes, without 
limitation: 

(1) All payments due in connection with foreign trade, other 
current business, including services, and normal short-term bank- 
ing and credit facilities; 

(2) Payments due as interest on loans and as net income from 
other investments; 

(3) Payments of moderate amount for amortization of loans 
or for depreciation of direct investments; 

(4) Moderate remittances for family living expenses. 

The Fund may, after consultation with the members concerned, deter- 
mine whether certain specific transactions are to be considered cur- 
rent transactions or capital transactions. 



336 

E(i) Gold tranche purchase means a purchase by a member of the 
currency of another member in exchange for its own currency which 
does not cause the Fund's holdings of the member's currency to exceed 
one hundred percent of its quota, provided that for the purposes of 
this definition the Fund may exclude purchases and holdings under 
policies on the use of its resources for compensatory financing of 
export fluctuations.] 

Article XXX — Explanation of Terms 

In interpreting the provisions of this Agreement the Fund and 
its members shall he guided by the following provisions : 

(a) The Fund's holdings of a member s currency in the General 
Resources Account shall include any securities accepted by the Fund 
under Article III, Section 4. 

(b) /Stand-by arrangement means a decision of the Fund by which 
a member is assured that it will be able to make purchases from the 
General Resources Account in accordance with the terms of the deci- 
sion during a specified period and up to a specified amount. 

(c) Reserve tranche purchase means a purchase by a member of 
special drawing rights or the currency of another member in exchange 
for its own currency which does not cause the Fund's holdings of the 
member's currency in the General Resources Account to exceed its 
quota, provided that for the purposes of this definition the Fund may 
exclude purchases and holdings under: 

(i) Policies on the use of its general resources for compensatory 
financing of export fluctuations; 

(ii) Policies on the use of its general resources in connection 
with the financing of contributions to international buffer stocks 
of primary products; and 

(Hi) Other policies on the use of its general resources in respect 
of which the Fund decides, by an eighty-five percent majority of 
the total voting power, that an exclusion shall be made. 

(d) Payments for current transactions means payment which are 
not for the purpose of transferring capital, and includes, without 
limitation : 

(1) All payments due in connection with foreign trade, other 
current business, including services, and normal short-term bank- 
ing and credit facilities; 

(2) Payments due as interest on loans and as net income from 
other investments ; 

(3) Payments of moderate amount for amortization of loans 
or for depreciation of direct investments; and 

(4) Moderate remittance for family living expenses. 

The Fund may, after consultation with the members comerned, de- 
termine whether certain specific transactions are to be considered cur- 
rent transactions or capital transactions. 

(e) Net cumulative allocation of special drawing rights means the 
total amount of special drawing rights allocated to a participant less 
its share of special drawing rights that have been cancelled under 
Article XVIII, Section 2(a). 

(/) A freely usable currency means a member's currency that the 
Fund determines (i) is, in fact, widely used to make payments for in- 



337 

temational transactions, and (ii) is widely traded in the principal ex- 
change markets. 

(g) Members that were members on August 31, 1975 shall be deemed 
to include a member that accepted membership after that date pur- 
suant to a resolution of the Board of Governors adopted before that 
date. 

(h) Transactions of the Fund means exchanges of monetary assets 
by the Fund for other monetary assets. Operations of the Fund means 
other uses or receipts of monetary assets by the Fund. 

(i) Transactions in special draioing rights means exchanges of spe- 
cial drawing rights for other monetary assets. Operations in special 
drawing rights ineans other uses of special drawing rights. 

[Article XX — Inaugural Provisions] Article XXXI — Final 

Provisions 

6ectton 1. entry into force 

This Agreement shall enter into force when it has been signed on 
behalf of governments having sixty-five percent of the total of the 
quotas set forth in Schedule A and when the instruments referred 
to in Section 2(a) of this Article have been deposited on their behalf, 
but in no event shall this Agreement enter into force before May 1, 
1945. 

6ECTION 2. SIGNATURE 

(a) Each government on whose behalf this Agreement is signed 
shall deposit with tho Government of the United States of America 
an instrument setting forth that it has accepted this Agreement in 
accordance with its law and has taken all steps necessary to enable 
it to carry out all of its obligations under this Agreement. 

(b) Each government shall become a member of the Fund as from 
the date of the deposit on its behalf of the instrument referred to in 
(a) above, except that no [government] country shall become a mem- 
ber before this Agreement enters into force under Section 1 of this 
Article. 

(c) The Government of the United States of America shall inform 
the governments of all countries whose names are set forth in Sched- 
ule A, and [all] the governments of all coindries whose membership 
is approved in accordance with Article II, Section 2, of all signatures 
of this Agreement and of the deposit of all instruments referred to in 
(a) above. 

(d) At the time this Agreement is signed on its behalf, each govern- 
ment shall transmit to the Government of the United States of 
America one one-hundredth of one percent of its total subscription 
in gold or United States dollars for the purpose of meeting adminis- 
trative expenses of the Fund. The Government of the United States 
of America shall hold such funds in a special deposit account and shall 
transmit them to the Board of Governors of the Fund when the 
initial meeting has been called [under Section 3 of this Article]. If 
this Agreement lias not come into force by December 31, 1945, the Gov- 
ernment of the United States of America shall return such funds 
to the governments that transmitted them. 



338 

(e) This Agreement shall remain open for signature at Washing- 
ton on behalf of the governments of the countries whose names are 
set forth in Schedule A until December 31, 1945. 

(/) After December 31, 1945, this Agreement shall be open for 
signature on behalf of the government of any country whose mem- 
bership has been approved in accordance with Article II, Section 2. 

(g) By their signature of this Agreement, all governments accept 
it both on their own behalf and in respect of all their colonies, over- 
seas territories, all territories under their protection, suzerainty, or 
authority, and all territories in respect of which they exercise a 
mandate. 

1(h) In the case of governments whose metropolitan territories 
have been under enemy occupation, the deposit of the instrument 
referred to in (a) above may be delayed until one hundred eighty days 
after the date on which these territories have been liberated. If, how- 
ever, it is not deposited by any such government before the expiration 
of this period the signature affixed on behalf of that government shall 
become void and the portion of its subscription paid under (d) above 
shall be returned to it.] 

(h) Subsection (d) above shall come into force with regard to each 
signatory government as from the date of its signature. 

l(i) Paragraphs (d) and (h) shall come into force with regard to 
each signatory government as from the date of its signature.} 

[SECTION 3. INAUGURATION OF THE FUND 

[(#) As soon as this Agreement enters into force under Section 1 of 
this Article, each member shall appoint a governor and the member 
having the largest quota shall call the first meeting of the Board of 
Governors. 

[(£>) At the first meeting of the Board of Governors, arrangements 
shall be made for the selection of provisional executive directors. Tho 
governments of the five countries for which tho largest quotas are 
set forth in Schedule A shall appoint provisional executive directors. 
If one or more of such governments have not become members, tho 
executive directorships they would be entitled to fill shall remain va- 
cant until they become members, or until January 1, 1946, whichever 
is the earlier. Seven provisional executive directors shall be elected in 
accordance with the provisions of Schedule C and shall remain in 
office until the date of the first regular election of executive directors 
which shall be held as soon as practicable after January 1, 1946. 

\_{c) The Board of Governors may delegate to the provisional 
executive directors any powers except those which may not be dele- 
gated to the Executive Directors. 

[SECTION 4. INITIAL DETERMINATION OF PAR VALUES 

[(#) When the Fund is of the opinion that it wiH shortly be in a 
position to begin exchange transactions, it shall so notify tho members 
and shall request each member to communicate within thirty days tho 
par value of its currency based on the rates of exchange prevailing on 
the sixtieth day before the entry into force of this Agreement. No 
member whose metropolitan territory has been occupied by the enemy 
shall be required to make such a communication while that territory 
is a theater of major hostilities or for such period thereafter as 



339 

the Fund may determine. When such a member communicates the par 
value of its currency the provision of (d) below shall apply. 

[(&) The par value communicated by a member whose metropolitan 
territory has not been occupied by the enemy shall be the par value 
of that member's currency for the purposes of this Agreement, unless, 
within ninety days after the request referred to in (a) above has been 
received, (i) the member notifies the Fund that it regards the par 
value as unsatisfactory, or (ii) the Fund notifies the member that in its 
opinion the par value cannot be maintained without causing recourse 
to the Fund on the part of that member or others on a scale prejudicial 
to the Fund and to members. When notification is given under (i) or 
(ii) above, the Fund and the member shall, within a period deter- 
mined by the Fund in the light of all relevant circumstances, agree 
upon a suitable par value for that currency. If the Fund and member 
do not agree within the period so determined, the member shall be 
deemed to have withdrawn from the Fund on the date when the period 
expires. 

[(e) When the par value of a member's currency has been estab- 
lished under (b) above, either by the expiration of ninety days with- 
out notification, or by agreement after notification, the member shall 
be eligible to buy from the Fund the currencies of other members to 
the full extent permitted in this Agreement, provided that the Fund 
has begun exchange transactions. 

[(</) In the case of a member whose metropolitan territory had 
been occupied by the enemy, the provisions of (b) above shall apply, 
subject to the following modifications : 

(i) The period of ninety days shall be extended so as to end 
on a date to be fixed by agreement between the Fund and the 
member. 

(ii) Within tho extended period the member may, if the Fund 
has begun exchange transactions, buy from the Fund with its 
currency the currencies of other members, but only under such 
conditions and in such amounts as may be prescribed by the 
Fund. 

(iii) At any time before the date fixed under (i) above, changes 
may be made by agreement with the Fund in the par value com- 
municated under (a) above. 
[(e) If a member whose metropolitan territory has been occupied 
by the enemy adopts a new monetary unit before the date to be fixed 
under (d) (i) above, the par value fixed by that member for the new 
unit shall be communicated to tho Fund and the provisions of (d) 
above shall apply. 

[(/) Changes in par values agreed with the Fund under this Sec- 
tion shall not be taken into account in determining whether a proposed 
change falls within (i), (ii), or (iii) of Article IV, Section 5(c). 

[(<?) A member communicating to the Fund a par value for the 
currency of its metropolitan territory shall simultaneously communi- 
cato a value, in terms of that currency, for each separate currency, 
where such exists, in the territories in respect of which it has accepted 
this Agreement under Section 2 (g) of this Article, but no member 



340 

shall be required to make a communication for the separate currency 
of a territory which has been occupied by the enemy while that terri- 
tory is a theater of major hostilities or for such period thereafter 
as the Fund may determine. On the basis of the par value so communi- 
cated, the Fund shall compute the par value of each separate currency. 
A communication or notification to the Fund under (a), (6), or (d) 
above regarding the par value of a currency, shall also be deemed, 
unless the contrary is stated, to be a communication or notification 
regarding the par value of all the separate currencies referred to 
above. Any member may, however, make a communication or notifica- 
tion relating to the metropolitan or any of the separate currencies 
alone. If the member does so, the provisions of the preceding para- 
graphs (including (d) above, if a territory where a separate currency 
exists has been occupied by the enemy) shall apply to each of these 
currencies separately. 

1(h) The Fund shall begin exchange transactions at such date as 
it may determine after members having sixty-five percent of the total 
of the quotas set forth in Schedule A have become eligible, in accord- 
ance with the preceding paragraphs of this Section, to purchase the 
currencies of other members, but in no event until after major hostili- 
ties in Europe have ceased. 

l(i) The Fund may postpone exchange transactions with any mem- 
ber if its circumstances are such that, in the opinion of the Fund, they 
would lead to use of the resources of the Fund in a manner contrary 
to the purposes of this Agreement or prejudicial to the Fund or the 
members. 

[(?') The par values of the currencies of governments which indi- 
cate their desire to become members after December 31, 1945, shall be 
determined in accordance with the provisions of Article II, Section 2.] 

Article [XXI] XV — Special Drawing Rights 

SECTION 1 . AUTHORITY TO ALLOCATE SPECIAL DRAWING RIGHTS 

To meet the need, as and when it arises, for a supplement to exist- 
ing reserve assets, the Fund is authorized to allocate special drawing 
rights to members that are participants in the Special Drawing 
[Account] Department. 

[SECTION 2. UNIT OF VALUE 

[The unit of value of special drawing rights shall be equivalent to 
0.888 671 gram of fine gold.] 

SECTION 2. VALUATION OF THE SPECIAL DRAWING RIGHT 

The method of valuation of the special drawing right shall he 
determined by the Fund by a seventy percent majority of the total 
voting power, provided, however, that an eighty-five percent majority 
of the total voting power shall be required for a change in the prin- 
ciple of valuation or a fundamental change in the application of the 
principle in effect. 






341 

[Article XXII — General Account and Special Drawing 

Account] 

Article XVI — General Department and Special Drawing 
Rights Department 

section 1. separation of operations and transactions 

All operations and transactions involving special drawing rights 
shall be conducted through the Special Drawing [Account] Rights 
Department. All other operations and transactions on the account of 
the Fund authorized by or under this Agreement shall be conducted 
through the General [Account] Department. Operations and trans- 
actions pursuant to Article [XXIII] XVII, Section 2, shall be con- 
ducted through the General [Account] Department as Avell as the 
Special Drawing [Account] Rights Department. 

SECTION 2. SEPARATION OF ASSETS AND PROPERTY 

[All assets and property of the Fund shall be held in the General 
Account, except that assets and property acquired under Article 
XXVI, Section 2, and Articles XXX and XXXI and Schedules H 
and I shall be held in the Special Drawing Account. Any assets or 
property held in one Account shall not be available to discharge or 
meet the liabilities, obligations, or losses of the Fund incurred in the 
conduct of the operations and transactions of the other Account, ex- 
cept that the expenses of conducting the business of the Special 
Drawing Account shall be paid by the Fund from the General Ac- 
count which shall be reimbursed from time to time by assessments un- 
der Article XXVI, Section 4, made on the basis of a reasonable 
estimate of such expenses.] 

All assets and property of the Fund, except resources administered 
under Article V, Section- %{b), shall be held in the General Depart- 
ment, provided that assets and property acquired under Article XX, 
Section and Article XXIV and XXV and Schedules H and I shall 
be held in the Special Drawing Rights Department. Any assets or 
property held in one Department shall not be available to discharge 
or meet the liabilities, obligations, or losses of the Fund incurred in 
the conduct of the operations and transactions of the other Depart- 
ment, except that the expenses of conducting the business of the 
Special Drawing Rights Department shall be paid by the Fund from 
the General Department which shall be reimbursed in special drawing 
rights from time to time by assessments under Article XX, Section /+ 
made on the basis of a reasonable estimate of such expenses. 

SECTION 3. RECORDING AND INFORMATION 

All changes in holdings of special drawing rights shall take effect 
only when recorded by the Fund in the Special Drawing [Account] 
Rights Department. Participants shall notify the Fund of the pro- 
visions of this Agreement under which special drawing rights are 
used. The Fund may require participants to furnish it with such other 
information as it deems necessary for its functions. 



342 

Article [XXIII] XVII — Participants and Other Holders of 
Special Drawing Rights 

section 1. participants 

Each member of the Fund that deposits with the Fund an instru- 
ment setting forth that it undertakes all the obligations of a partici- 
pant in the Special Drawing [Account] Rights Department in accord- 
ance with its law and that it has taken all steps necessary to enable it to 
carry out all of these obligations shall become a participant in the 
Special Drawing [Account] Rights Department as of the date the 
instrument is deposited, except that no member shall become a par- 
ticipant before [Articles XXI through XXXII and Schedules F 
through TJthe provisions of this Agreement pertaining exclusively to 
the Special Draiving Rights Department have entered into force and 
instruments have been deposited under this Section by members that 
have at least seventy-five percent of the total of quotas. 

[SECTION 2. GENERAL ACCOUNT AS A HOLDER 

[The Fund may accept and hold special drawing rights in the Gen- 
eral Account and use them, in accordance with the provisions of this 
Agreement.] 

SECTION 2. FUND AS A HOLDER 

The Fund may hold special drawing rights in the General Re- 
sources Account and may accept and use them in operations and trans- 
actions conducted through the General Resources Account tvith par- 
ticipants in accordance with the provisions of this Agreement or with 
prescribed holders in accordance with the terms and conditions pre- 
scribed under Section 3 of this Article. 

SECTION 3. OTHER HOLDERS 

[The Fund by an eighty-five percent majority of the total voting 
power may prescribe : 

(i) as holders, non-members, members that are non-partici- 
pants, and institutions that perform functions of a central bank 
for more than one member; 

(ii) the terms and conditions on which these holders may be 
permitted to accept, hold, and use special drawing rights, in 
operations and transactions with participants; and 

(iii) the terms and conditions on which participants may enter 
into operations and transactions with these holders. 
[The terms and conditions prescribed by the Fund for the use of spe- 
cial drawing rights by prescribed holders and by participants in 
operations and transactions with them shall be consistent with the 
provisions of this Agreement.] 
The Fund may prescribe: 

(i) as holders, non-members, members that are non-partici- 
pants, institutions that perform functions of a central bank for 
more than one member, and, other official entities; 

(ii) the terms and conditions on which prescribed holders may 
be permitted to hold special drawing rights and may accept and 



343 

use them in operations and transactions xoith participants and 
other prescribed holders; and 

(Hi) the temns and conditions on which participants and the 
Fund through the General Resources Account may enter into 
operations and transactions in special drawing rights with pre- 
scribed holders. 
An eighty-fire percent majority of the total voting power shall be re- 
quired for prescriptions under (i) above. The terms and conditions 
prescribed by the Fund shall be consistent with the provisions of this 
Agreement and the effective functioning of the Special Drawing 
/lights Department. 

Article [XXIV] XVIII — Allocation and Cancellation of 
Special Drawing Rights 

section 1. principles and considerations governing 
allocation and cancellation 

(a) In all its decisions with respect to the allocation and cancella- 
tion of special drawing rights the Fund shall seek to meet the long- 
term global need, as and when it arises, to supplement existing reserve 
assets in such manner as will promote the attainment of its purposes 
and will avoid economic stagnation and deflation as well as excess 
demand and inflation in the world. 

(b) The first decision to allocate special drawing rights shall take 
into account, as special considerations, a collective judgment that there 
is a global need to supplement reserves, and the attainment of a better 
balance of payments equilibrium, as well as the likelihood of a better 
working of the adjustment process in the future. 

SECTION 2. ALLOCATION AND CANCELLATION 

(a) Decisions of the Fund to allocate or cancel special drawing 
rights shall be made for basic periods which shall run consecutively 
and shall bo five years in duration. The first basic period shall begin 
on the date of the first decision to allocate special drawing rights or 
such later date as may be specified in that decision. Any allocations 
or cancellations shall take place at yearly intervals. 

(b) The rates at which allocations are to be made shall be expressed 
as percentages of quotas on the date of each decision to allocate. The 
rates at which special drawing rights are to be cancelled shall be ex- 
pressed as percentages of net cumulative allocations of special draw- 
ing rights on the date of each decision to cancel. The percentages 
shall be the same for all participants. 

(c) In its decision for any basic period the Fund may provide, 
notwithstanding (a) and (b) above, that: 

(i) the duration of the basic period shall be other than five 
years; or 

(ii) the allocations or cancellations shall take place at other 
than yearly intervals; or 

(iii) the basis for allocations or cancellations shall be the 
quotas or net cumulative allocations on dates other than the dates 
of decisions to allocate or cancel. 



344 

(d) A member that becomes a participant after a basic period starts 
shall receive allocations beginning with the next basic period in which 
allocations are made after it becomes a participant unless the Fund 
decides that the new participant shall start to receive allocations be- 
ginning with the next allocation after it becomes a participant. If the 
Fund decides that a member that becomes a participant during a basic 
period shall receive allocations during the remainder of that basic 
period and the participant was not a member on the dates established 
under (b) or (c) above, the Fund shall determine the basis on which 
these allocations to the participant shall be made. 

(e) A participant shall receive allocations of special drawing rights 
made pursuant to any decision to allocate unless : 

(i) the governor for the participant did not vote in favor of 
the decision ; and 

(ii) the participant has notified the Fund in writing prior to 
the first allocation of special drawing rights under that decision 
that it does not wish special drawing rights to be allocated to it 
under the decision. On the request of a participant, the Fund 
may decide to terminate the effect of the notice with respect to 
allocations of special drawing rights subsequent to the termina- 
tion. 
(/) If on the effective date of any cancellation the amount of spe- 
cial drawing rights held by a participant is less than its share of the 
special drawing rights that are to be cancelled, the participant shall 
eliminate its negative balance as promptly as it gross reserve posi- 
tion permits and shall remain in consultation with the Fund for this 
purpose. Special drawing rights acquired by the participant after 
the effective rate of the cancellation shall be applied against its nega- 
tive balance and cancelled. 

SECTION 3. UNEXPECTED MAJOR DEVELOPMENTS 

The Fund may change the rates or intervals of allocation or can- 
cellation during the rest of a basic period or chango the length of a 
basic period or start a new basic period, if at any time the Fund finds 
it desirable to do so because of unexpected major developments. 

SECTION 4. DECISIONS ON ALLOCATIONS AND CANCELLATIONS 

(a) Decisions under Section 2(a), (&), and (c) or Section 3 of 
this Article shall be made by the Board of Governors on the basis 
of proposals of the Managing Director concurred in by the Executive 
[Directors] Board. 

(b) Before making any proposal, the Managing Director, after 
having satisfied himself that it will be consistent with the provisions 
of Section 1(a) of this Article, shall conduct such consultations as 
will enable him to ascertain that there is broad support among partici- 
pants for the proposal. In addition, before making a proposal for the 
first allocation, the Managing Director shall satisfy himself that the 
provisions of Section 1(b) of this Article have been met and that 
there is a broad support among participants to begin allocations; he 
shall make a proposal for the first allocation as soon after the establish- 
ment of the Special Drawing [Account] Rights Department as he is 
so satisfied. 



345 

(c) The Managing Director shall make proposals: 

(i) not later than six months before the end of each basic 
period ; 

(ii) if no decision has been taken with respect to allocation or 
cancellation for a basic period, whenever he is satisfied that the 
provisions of (b) above have been met; 

(ii) when, in accordance with Section 3 of this Article, he 
considers that it would be desirable to change the rate or intervals 
of allocation or cancellation or change the length of a basic period 
or start a new basic period ; or 

(iv) within six months of a request by the Board of Governors 
or the Executive [Directors] Board: 
provided that, if under (i), (iii), or (iv) above the Managing Direc- 
tor ascertains that there is no proposal which he considers to be con- 
sistent with the provisions of Section 1 of this Article that has broad 
support among participants in accordance with (b) above, he shall 
report to the Board of Governors and to the Executive [Directors] 
Board. 

(d) [A majority of eighty-five percent] An eighty-five percent 
majority of the total voting power shall be required for decisions 
under Section 2(a), (5), and (r) or Section 3 of this Article except 
for decisions under Section 3 with respect to a decrease in the ratesx>f 
allocation. 

Article [XXV] XIX — Operations and Transactions in Special 

Drawing Rights 

section 1. use of special drawing rights 

Special drawing rights may be used in the operations and trans- 
actions authorized by or under this Agreement. 

SECTION 2. OPERATIONS AND TRANSACTIONS BETWEEN PARTICIPANTS 

(a) A participant shall be entitled to use its special drawing rights 
to obtain an equivalent amount of currency from a participant desig- 
nated under Section 5 of this Article. 

(b) A participant, in agreement with another participant, may 
use its special drawing rights to obtain an equivali nt amount of cur- 
rency from the other participant : 

[(i) to obtain an equivalent amount of its own currency held 
by the other participant; or 

[(ii) to obtain an equivalent amount of currency from the 
other participant in any transactions, prescribed by the Fund, 
that would promote reconstitution by the other participant under 
Section 6(a) of this Article: prevent or reduce a negative balance 
of the other participant; offset the effect of a failure by the other 
participant to fulfill the expectation in Section 3(a) of this 
Article; or bring the holdings of special drawing rights by both 
participants closer to their net cumulative allocations. The Fund 
by an eighty-five percent majority of the total voting power may 
prescribe additional transactions or categories of transactions 
under this provision. Any transactions or categories of trans- 
actions prescribed by the~ Fund under this subsection (6) (ii) 



346 

shall be consistent with the other provisions of this Agreement 
and with the proper use of special drawing rights in accordance 
with this Agreement. 
[((?) A participant that provides currency to a participant using 

special drawing rights shall receive an equivalent amount of special 

drawing rights.] 

(c) The Fund, by a seventy percent majority of the total voting 
power, may prescribe operations in which a participant is authorized 
to engage in agreement with another participant on such terms and 
conditions as the Fund deems appropriate. The temns and conditions 
shall be consistent with the effective functioning of the Special Draw- 
ing Rights Department and the proper use of special draiving rights 
in accordance with this Agreement. 

(d) The Fund may make representations to a participant that 
enters into any operation or transaction under (b) or (c) above that 
in the judgment of the Fund may be prejudicial to the process of 
designation according to the principles of Section 5 of this Article or 
is othemvise inconsistent with Article XXII. A participant that per- 
sists in entering into such operations or transactions shall be subject 
to Article XXIII, Section 2(b). 

SECTION 3. REQUIREMENT OF NEED 

(a) In transactions under Section 2(a) of this Article, except as 
otherwise provided in (c) below, a participant will be expected to use 
its special drawing rights only [to meet balance of payments needs or 
in the light of developments in its official holdings of gold, foreign ex- 
change, and special drawing rights, and its reserve position in the 
Fund, and not for the sole purpose of changing the composition of the 
foregoing as between special drawing rights and the total of gold, for- 
eign exchange, and reserve position in the Fund] if it has a need be- 
cause of its balance of payments or its reserve position or developments 
in its reserves, and not for the sole purpose of changing the composi- 
tion of its reserves. 

(b) The use of special drawing rights shall not be subject to chal- 
lenge on the basis of the expectation in (a) above, but the Fund may 
make representations to a participant that fails to fulfill this expecta- 
tion. A participant that persists in failing to fulfill this expectation 
shall be subject to Article [XXIX] XXIII, Section 1(b). 

[(<?) Participants may use special drawing rights without fulfilling 
the expectation in (a) above to obtain an equivalent amount of cur- 
rency from another participant in any transactions, prescribed by 
the Fund, that would promote rcconstitution by the other participant 
under Section 6(a) of this Article; prevent or reduce a negative bal- 
ance of the other participant ; offset the effect of a failure by the other 
participant to fulfill the expectation in (a) above; or bring the hold- 
ings of special drawing rights by both participants closer to their net 
cumulative allocations.] 

(c) The Fund may ivaive the expectation in (a) above in any trans- 
actions in which a participant uses special drawing rights to obtain an 
equivalent amount of currency from a participant designated under 
Section 5 of this Article that would promote rcconstitution by the 
other participant under Section 6(a) of this Article; prevent or 



347 

reduce a negative balance of the other participant ; or offset the effect 
of a failure by the other participant to fulfill the expectation in (a) 
above. 

SECTION 4. OBLIGATION TO PROVIDE CURRENCY 

A participant designated by the Fund under Section 5 of this 
Article shall provide on demand a freely usable currency [convertible 
in fact] to a participant using special drawing rights under Section 
(2) (a) of this Article. A participant's obligation to provide currency 
shall not [exceed] extend beyond the point at which its holdings of 
special drawing rights in excess of its net cumulative allocation are 
equal to twice its net cumulative allocation or such higher limit as may 
be agreed between a participant and the Fund. [A participant may 
provide currency in excess of the obligatory limit or any agreed 
higher limit.] 

SECTION 5. DESIGNATION OF PARTICIPANTS TO PROVIDE CURRENCY 

(a) The Fund shall ensure that a participant will be able to use its 
special drawing rights by designating participants to provide cur- 
rency for specified amounts of special drawing rights for the purposes 
of Sections 2(a) and 4 of this Article. Designations shall be made 
in accordance with the following general principles supplemented by 
such other principles as the Fund may adopt from time to time: 

(i) A participant shall be subject to designation if its balance 
of payments and gross reserve position is sufficiently strong, but 
this will not preclude the possibility that a participant with a 
strong reserve position will be designated even though it has a 
moderate balance of payments deficit. Participants shall be desig- 
nated in such manner as will promote over time a balanced 
distribution of holdings of special drawing rights among them. 

(ii) Participants shall be subject to designation in order to 
promote reconstitution under Section 6(a) of this Article; to 
reduce negative balances in holdings of special drawing rights; 
or to offset the effect of failures to fulfill the expectation in Sec- 
tion 3(a) of this Article. 

(iii) In designating participants the Fund normally shall give 
priority to those that need to acquire special drawing rights to 
meet the objectives of designation under (ii) above. 

(b) In order to promote over time a balanced distribution of hold- 
ings of special drawing rights under (a) (i) above, the Fund shall 
apply the rides for designation in Schedule F or such rules as may be 
adopted under (c) below. 

(c) The rules for designation shall be reviewed [before the end of 
the first and each subsequent basic period and the Fund may adopt 
new rules as the result of a review] and neio rules shall be adopted if 
necessary. Unless new rules are adopted, the rules in force at the time 
of the review shall continue to apply. 

SECTION G. RECONSTITUTION 

(a) Participants that use their special drawing rights shall re- 
constitute their holdings of them in accordance with the rules for re- 



348 

constitution in Schedule G or such rules as may be adopted under (b) 
below. 

(b) The rules for reconstitution [shall] may be reviewed [before 
the end of the first and each subsequent basic period] at any time and 
new rules shall be adopted if necessary. Unless new rules are adopted 
or a decision is made to abrogate rules for reconstitution, the rules in 
force at the time of the review shall continue to apply. [An eighty- 
five] A seventy percent majority of the total voting power shall be 
required for decisions to adopt, modify, or abrogate the rules for 
reconstitution. 

[SECTION 7. OPERATIONS AND TRANSACTIONS THROUGH THE 
GENERAL ACCOUNT 

1(a) Special drawing rights shall be included in a member's mone- 
tary reserves under Article XIX for the purposes of Article III, Sec- 
tion 4(a), Article V, Section 7(b) and (c), Article V, Section 8(/), 
and Schedule B, paragraph 1. The Fund may decide that in calcu- 
lating monetary reserves and the increase in monetary reserves during 
any year for the purpose of Article V, Section 7(b) and (c), no 
account shall be taken of any increase or decrease in these monetary 
reserves which is due to allocations or cancellations of special drawing 
rights during the year. 

[(&) The Fund shall accept special drawing rights : 

(i) in repurchases accruing in special drawing rights under 
Article V, Section 7 (b) ; and 

(ii) in reimbursement pursuant to Article XXVI, Section 4. 

[(c) The Fund may accept special drawing rights to the extent it 
may decide : 

(i) in payment of charges ; and 

(ii) in repurchases other than those under Article V, Section 
7(b), in proportions which, as far as feasible, shall be the same 
for all members. 

[(a 7 ) The Fund, if it deems such action appropriate to replenish 
its holdings of a participant's currency and after consultation with 
that participant on alternative ways of replenishment under Article 
VII, Section 2, may require that participant to provide its currency 
for special drawing rights held in the General Account subject to 
Section 4 of this Article. In replenishing with special drawing rights, 
the Fund shall pay due regard to the principles of designation under 
Section 5 of this Article. 

[(e) To the extent that a participant may receive special drawing 
rights in a transaction prescribed by the Fund to promote reconstitu- 
tion by it under Section 6(a) of this Article, prevent or reduce a nega- 
tive balance, or offset the effect of a failure by it to fulfill the expec- 
tation in Section 3(a) of this Article, the Fund may provide the 
participant with special drawing rights held in the General Account 
for gold or currency acceptable to the Fund. 

[(/) In any of the other operations and transactions of the Fund 
with a participant conducted through the General Account the Fund 
may use special drawing rights by agreement with the participant. 

[(#) The Fund may levy reasonable charges uniform for all par- 
ticipants in connection with operations and transactions under this 
Section.] 



349 

SECTION 7. EXCHANGE RATES 

(a) Except as otherwise provided in (b) below, the exchange rates 
for transactions between participants under Section 2(a) and (b) of 
this Article shall be such that participants using special drawing 
rights shall receive the same value whatever currencies might be pro- 
vided and whichever participants pro ride those currencies, and the 
Fund shall adopt regulations to give effect to this principle. 

(b) The Fund, by an eighty-five percent majority of the total voting 
power, may adopt policies under which in exceptional circumstances 
the Fund, by a seventy percent majority of the total voting power, may 
authorize participants entering into transactions under Section 2(b) 
of this Article to agree on exchange rates other than those applicable 
under (a) above. 

(c) The Fund shall consult a participant on the procedure for de- 
termining rates of exchangi for its currency. 

(d) For the purpose of this provision the term participant includes 
a terminating participant. 

[SECTION 8. EXCHANGE RATES 

\_(a) The exchange rates for operations or transactions between 
participants shall bo such that a participant using special drawing 
rights shall receive 1 the same value whatever currencies might be pro- 
vided and whichever participants provide those currencies, and the 
Fund shall adopt regulations to give effect to this principle. 

\,(b) The Fund shall consult a participant on the procedure for 
determining rates of exchange for its currency. 

[(r) For the purpose of this provision the term participant in- 
cludes a terminating participant.] 

[Article XXVI— Special Drawing Account Interest 
and Charges J 

Article XX — Special Drawing Rights Department 

f.XTEREST AND CHARGES 
SECTION 1. INTEREST 

Interest at the same rate for all holders shall be paid by the Fund 
to each holder on the amount of its holdings of special drawing 
rights. The Fund shall pay the amount due to each holder whether 
or not sufficient charges are received to meet the payment of interest. 

SECTION 2. CHARGES 

Charges at the same rate for all participants shall be paid to the 
Fund by each participant on the amount of its net cumulative alloca- 
tion of special drawing rights plus any negative balance of the par- 
ticipant or unpaid charges. 

SECTION 3. RATE OF INTEREST AND CIIARGE8 

[The rate of interest shall be equal to the rate of charges and shall 
be one and one-half percent per annum. The Fund in its discretion 
may increase or reduce this rate, but the rate shall not be greater than 



350 

two percent or the rate of remuneration decided under Article V, 
Section 9, whichever is higher, or smaller than one percent or the rate 
of remuneration decided under Article V, Section 9, whichever is 

lower.] . 

The Fund shall determine the rate of interest by a seventy percent 
majority of the total voting power. The rate of charges shall be equal 
to the rate of interest. 

SECTION 4. ASSESSMENTS 

When it is decided under Article [XXII] XVI, Section 2, that re- 
imbursement shall be made, the Fund shall levy assessments for this 
purpose at the same rate for all participants on their net cumulative 
allocations. 

SECTION 5. PAYMENT OF INTEREST, CHARGES, AND ASSESSMENTS 

Interest, charges, and assessments shall be paid in special drawing 
rights. A participant that needs special drawing rights to pay any 
chargo or assessment shall be obligated and entitled to obtain them, 
[at its option for gold or] for currency acceptable to the Fund, in a 
transaction with the Fund conducted through the General Resources 
Account. If sufficient special drawing rights cannot be obtained in 
this way, the participant shall be obligated and entitled to obtain them 
with freely useable currency [convertible in fact] from a participant 
which the Fund shall specify. Special drawing rights acquired by a 
participant after the date for payment shall be applied against its 
unpaid charges and cancelled. 

[Article XXVII — Administration of the General Account 
and the Special Draaving Account] 

Article XXI — Administration of the General Department 
and the Special Drawing Rights Department 

(a) The General [Account] Department and the Special Drawing 
[Account] Rights Department shall be administered in accordance 
with the provisions of Article XII, subject to the following provisions : 

[(i) The Board of Governors may delegate to the Executive 
Directors authority to exercise any powers of the Board with re- 
spect to special drawing rights except those under Article XXIII, 
Section 3, Article XXIV, Section 2(a), (&), and (c), and Sec- 
tion 3, the penultimate sentence of Article XXV, Section 2(b), 
Article XXV, Section 6(6), and Article XXXI(a).] 

[(ii)3 (*) For meetings of or decisions by the Board of Gov- 
ernors on matters pertaining exclusively to the Special Drawing 
[Account] Rights Department only requests by or the presence 
and the votes of governors appointed by members that are par- 
ticipants shall be counted for the purpose of calling meetings and 
determining whether a quorum exists or whether a decision is 
made by the required majority. 

[(iii)] (ii) For decisions by the Executive [Directors] Board 
on matters pertaining exclusively to the Special Drawing 
[Account] Rights Department only Executive directors ap- 



351 

pointed or elected by at least one member that is a participant 
shall be entitled to vote. Each of these Executive directors shall 
be entitled to cast the number of votes allotted to the member 
which is a participant that appointed him or to the members that 
are participants whose votes counted towards his election. Only 
the presence of Executive directors appointed or elected by mem- 
bers that are participants and the votes allotted to members that 
are participants shall be counted for the purpose of determining 
whether a quorum exists or whether a decision is made by the re- 
quired majority. For the purposes of this provision, an agreement 
under Article XI L Section -Hi) (ii) by a membt r that is a partici- 
pant shall entitle an appointed Executive Director to vote and 

cast the number of rotes allotted to the member. 

[(i y )] {Hi) Questions of the general administration of the 
Fund, including reimbursement under Article [XXII] XVI, 
Section 2, and any question whether a matter pertains to both 
[Accounts] Departments or exclusively to the Special Drawing 
[Account] Rights Department shall be decided as if they per- 
tained exclusively to the General [Account] Department. De- 
cisions with respect to the method of valuation of the special 
drawing light, flu acceptance and holding of special drawing 
rights in the General Resources Account of the General Depart- 
ment and the use of them, and other decisions a fleeting the opera- 
tions and transactions conducted through both the General Re- 
sources Account of the General Department and the Special 
Drawing [Account] Rights Departna nt shall be made by the 
majorities required for decisions on matters pertaining exclu- 
sively to each [Account] Departnu nt. A decision on a matter per- 
taining to the Special Drawing [Account] Rights Department 
shall so indicate. 

(b) In addition to the privileges and immunities that are accorded 
under Article IX of this Agreement, no tax of any kind shall be levied 
on special drawing rights or on operations or transactions in special 
drawing rights. 

(c) A question of interpretation of the provisions of this Agree- 
ment on matters pertaining exclusively to the Special Drawing 
[Account] Rights Department shall be submitted to the Executive 
[Directors] Board pursuant to Article [XVIII] XXIX (a) only on 
the request of a participant. In any case where the Executive [Direc- 
tors] Board have given a decision on a question of interpretation per- 
taining exclusively to the Special Drawing [Account] Rights Depart- 
ment only a participant may require the question be referred to the 
Board of Governors under Article [XVIIT] XXIX (h). The Board 
of Governors shall decide whether a governor appointed by a member 
that is not a participant shall be entitled to vote in the Committee on 
Interpretation on questions pertaining exclusively to the Special 
Drawing [Account] Rights Departnu nt. 

(d) Whenever a disagreement arises between the Fund and a par- 
ticipant that, has terminated its participation in the Special Drawing 
[Account] Rights Department or between the Fund and any partici- 
pant during the liquidation of the Special Drawing [Account] Rights 
Department with respect to any matter arising exclusively from par- 



352 

ticipation in the Special Drawing [Account] Rights. Department, the 
disagreement shall be submitted to arbitration in accordance with the 
procedures in Article [XVIII] XXIX (c). 

Article [XXVIII] XXII — General Obligations of Participants 

In addition to the obligations assumed with respect to special draw- 
ing rights under other Articles of this Agreement, each participant 
undertakes to collaborate with the Fund and with other participants 
in order to facilitate the effective functioning of the Special Drawing 
[Account] Rights Department and the proper use of special drawing 
rights in accordance with this Agreement and with the objective of 
making the special drawing right the principal reserve asset in the 
international monetary system. 

Article [XXIX] XXIII — Suspension of Operations and 
Transactions in Special Drawing Rights 

section i. emergency provisions 

[In the event of an emergency or the development of unforeseen 
circumstances threatening the operations of the Fund with respect to 
the Special Drawing Account, the Executive Directors by unanimous 
vote may suspend for a period of not more than one hundred twenty 
days the operation of any of the provisions relating to special drawing 
rights, and the provisions of Article XVI, Section 1 (b), (c), and 
(d) shall then apply.] 

In the event of an emergency or the development of unforeseen cir- 
cumstances threatening the activities of the Fund with respect to the 
Special Drawing Rights Department, the Executive Board, by an 
eighty-five percent majority of the total voting power, may suspend 
for a period of not more than one year the operation of any of the pro- 
visions relating to operations and transactions in special drawing 
rights, and the provisions of Article XXV II, Section 1 (b), (c), and 
(d) shall then apply. 

SECTION 2. FAILURE TO FULFILL OBLIGATIONS 

(a) If the Fund finds that a participant has failed to fulfill its 
obligations under Article [XXV] XIX, Section 4, the right of the 
participant to use its special drawing rights shall be suspended unless 
the Fund otherwise determines. 

(b) If the Fund finds that a participant has failed to fulfill any 
other obligations with respect to special drawing rights, the Fund 
may suspend the right of the participant to use special drawing rights 
it acquires after the suspension. 

(c) Regulations shall be adopted to ensure that before action is 
taken against any participant under (a) or (b) above, the participant 
shall be informed immediately of the complaint against it and given 
an adequate opportunity for stating its case, both orally and in writing. 
Whenever the participant is thus informed of a complaint relating to 
(a) above, it shall not use special drawing rights pending the dis- 
position of the complaint. 



353 

(d) Suspension under (a) or (b) above or limitation under (c) 
above shall not affect a participant's obligation to provide currency 
in accordance with Article [XXV] XIX, Section 4. 

(e) The Fund may at any time terminate a suspension under (a) 
or (b) above, provided that a suspension imposed on a participant 
under (b) above for failure to fulfill the obligation under Article 
[XXV] XIX. Section 6(a), shall not be terminated until one hun- 
dred eighty days after the end of the first calendar quarter during 
which the participant complies with the rules for reconstitution. 

(/) The right of a participant to use its special drawing rights 
shall not be suspended because it has become ineligible to use the 
Fund's general resources under [Article IV, Section 6, Article V, 
Section 5] Article F, Section 5, Article VI, Section 1, or Article 
[XV] XXVI, Section 2(a), Article [XV] XXVI, Section 2, shall 
not apply because a participant has failed to fulfill any obligations 
with respect to special drawing rights. 

Article [XXX] XXIV — Termination of Participation 

SECTION 1. RIGHT TO TERMINATE PARTICIPATION 

(a) Any participant may terminate its participation in the Special 
Drawing [Account] Rights Department at any time by transmitting 
a notice in writing to the Fund at its principal office. Termination 
shall become effective on the date the notice is received. 

(b) A participant that withdraws from membership in the Fund 
shall be deemed to have simultaneously terminated its participation 
in the Special Drawing [Account] Rights Department. 

SECTION 2. SETTLEMENT ON TERMINATION 

(a) When a participant terminates its participation in the Special 
Drawing [Account] Rights Department all operations and trans- 
actions by the terminating participant in special drawing rights shall 
cease except as otherwise permitted under an agreement made pur- 
suant to (c) below in order to facilitate a settlement or as provided in 
Sections 3, 5, and 6 of this Article or in Schedule H. Interest and 
charges that accrued to the date of termination and assessments levied 
before that date but not paid shall be paid in special drawing rights. 

(b) The Fund shall be obligated to redeem all special drawing 
rights held by the terminating participant, and the terminating partic- 
ipant shall be obligated to pay to the Fund an amount equal to its 
net cumulative allocation and any other amounts that may be duo 
and payable because of its participation in the Special Drawing [Ac- 
count] Rights Department. These obligations shall be set off against 
each other and the amount of special drawing rights held by the ter- 
minating participant that is used in the setoff to extinguish its obliga- 
tion to the Fund shall be cancelled. 

(c) A settlement shall be made with reasonable dispatch by agree- 
ment between the terminating participant and the Fund with respect 
to any obligation of the terminating participant or the Fund after the 
setoff in (b) above. If agreement on a settlement is not reached 
promptly the provisions of Schedule H shall apply. 



354 



SECTION 3. INTEREST AND CHARGES 



After the date of termination the Fund shall pay interest on any 
outstanding balance of special drawing rights held by a terminating 
participant and the terminating participant shall pay charges on 
any outstanding obligation owed to the Fund at the times and rates 
prescribed under Article [XXVI] XX. Payment shall be made in 
special drawing rights. A terminating participant shall be entitled to 
obtain special drawing rights with a freely usuable currency [converti- 
ble in fact] to pay charges or assessments in a transaction with a 
participant specified by the Fund or by agreement from any other 
holder, or to dispose of special drawing rights received as interest in 
a transaction with any participant designated under Article [XXV] 
XIX, Section 5, or by agreement with any other holder. 

SECTION 4. SETTLEMENT OF OBLIGATION TO THE FUND 

[Gold or currency] Currency received by the Fund from a termi- 
nating participant shall be used by the Fund to redeem special draw- 
ing rights held by participants in proportion to the amount by which 
each participant's holdings of special drawing rights exceed its net 
cumulative allocation at the time the [gold or] currency is received by 
the Fund. Special drawing rights so redeemed and special drawing 
rights obtained by a terminating participant under the provisions of 
this Agreement to meet any installment due under an agreement on 
settlement or under Schedule H and set off against that installment 
shall be cancelled. 

SECTION 5. SETTLEMENT OF OBLIGATION TO A TERMINATING 
PARTICIPANT 

Whenever the Fund is required to redeem special drawing rights 
held by a terminating participant, redemption shall be made with 
currency [or gold] provided by participants specified by the Fund. 
These participants shall be specified in accordance with the principles 
in Article [XXI 7 ] XIX, Section 5. Each specified participant shall 
provide at its option the currency of the terminating participant or 
a freely usuable currency [convertible in fact or gold] to the Fund and 
shall receive an equivalent amount of special drawing rights. How- 
ever, a terminating participant may use its special drawing rights to 
obtain its own currency, a freely usuable currency [convertible in fact, 
or gold], or any other asset from any holder, if the Fund so permits. 

SECTION 6. GENERAL ReSOUrCCS ACCOUNT TRANSACTIONS 

In order to facilitate settlement with a terminating participant the 
Fund may decide that a terminating participant shall : 

(i) use any special drawing rights held by it after the setoff 
in Section 2(5) of this Article, when they are to be redeemed, 
in a transaction with the Fund conducted through the General 
Resources Account to obtain its own currency or a freely usuable 
currency [convertible in fact] at the option of the Fund; or 



355 

(ii) obtain special drawing rights in a transaction with the 
Fund conducted through the General Resources Account for a 
currency acceptable to the Fund [or gold] to meet any charges or 
installment due under an agreement or the provisions of Schedule 
H. 
[Article XXXI — Liquidation of the Special Drawing Account] 

Article XXV — Liquidation of the Special Drawing 
Rights D epa rtment 

(a) The Special Drawing [Account] Rights Department may not 
be liquidated except by decision of the Board of Governors. In an 
emergency, if the Executive [Directors] Board decide the liquidation 
of the Special Drawing [Account] Rights Department may be neces- 
sary, [they] it may temporarily suspend allocations or cancellations 
and all operations and transactions in special drawing rights pending 
decision by the Board of Gore mors. A decision by the Board of Gov- 
ernors to liquidate the Fund shall be a decision to liquidate both the 
General [Account] Department and the Special Drawing [Account] 
Rig h ts Depart mod. 

(b) If the Board of Governors decides to liquidate the Special 
Drawing [Account] Rights Department, all allocations or cancella- 
tions and all operations and transactions in special drawing rights 
and the activities of the Fund with respect to the Special Drawing 
[Account] Rights Department shall cease except those incidental to 
the orderly discharge of the obligations of participants and of the 
Fund with respect to special drawing rights, and all obligations of the 
Fund and of participants under this Agreement with respect to spe- 
cial drawing rights shall cease except those set out in this Article. 
XXX] Article XX, Article XXI(d), Article XXIV, Article 
XXIX(c), and Schedule 11, or any agreement reached under Article 
[XXX] XXIV subject to paragraph 4 of Schedule [II, Article 
XXXII] //, and Schedule I. 

(c) Upon liquidation of the Special Drawing [Account] Rights 
Department, interest and charges that accrued to the date of liquida- 
tion and assessments levied before that date but not paid shall be paid 
in special drawing rights. The Fund shall be obligated to redeem all 
special drawing rights held by holders and each participant shall be 
obligated to pay the Fund an amount equal to its net cumulative allo- 
cation of special drawing rights and such other amounts as may be 
due and payable because of its participation in the Special Drawing 
[Account] Ri glits Department. 

(d) Liquidation of the Special Drawing [Account] Rights De- 
partment shall be administered in accordance with the provisions of 
Schedule I. 

[Article XXXII — Explanation of Terms With Respect to 
Special Drawing Rights 

[In interpreting the provisions of this Agreement with respect to 
special drawing rights the Fund and its members shall be guided by 
the following: 

[(<?) Net cumulative allocation of special drawing rights means 
the total amount of special drawing rights allocated to a participant 



356 



less its share of special drawing rights that have been cancelled under 
Article XXIV, Section 2(a). 

[(&) Currency convertible in fact means : 

(1) a participant's currency for which a procedure exists for 
the conversion of balances of the currency obtained in transac- 
tions involving special drawing rights into each other currency 
for which such procedure exists, at rates of exchange prescribed 
under Article XXV, Section 8, and which is the currency of a 
participant that 

(i) has accepted the obligations of Article VIII, Sections 
2, 3, and 4, or 

(ii) for the settlement of international transactions in fact 
freely buys and sells gold within the limits prescribed by the 
Fund under Section 2 of Article IV; or 

(2) currency convertible into a currency described in para- 
graph (1) above at rates of exchange prescribed under Article 
XXV; Section 8. 

[(c) A participant's reserve position in the Fund means the sum of 
the gold tranche purchases it could make and the amount of any 
indebtedness of the Fund which is readily repayable to the participant 
under a loan agreement.] 

[The signature and depository clause reproduced below followed the text of 
Article XX in the original Articles of Agreement] 

Done at Washington, in a single copy which shall remain deposited 
in the archives of the Government of the United States of America, 
which shall transmit certified copies to all governments whose names 
are set forth in Schedule A and to all governments whose membership 
is approved in accordance with Article II, Section 2. 

Schedule A — Quotas ' 

[In millions of U.S. dollars] 



Australia 200 

Belgium 225 

Bolivia 10 

Brazil 150 

Canada 300 

Chile 50 

China 550 

Colombia 50 

Costa Rica 5 

Cuba 50 

Czech osloyakia 125 

Denmark (') 

Dominican Republic 5 

Ecuador 5 

Egypt 45 

El Salvador 2. 

Ethiopia 6 

France 450 



Greece 

Guatemala 

Haiti 

Honduras . 
Iceland __. 



40 
5 
5 
2.5 

1 



India 400 

Iran 25 

Iraq 8 

Liberia .5 

Luxembourg 10 

Mexico 90 

Netherlands 275 

New Zealand 50 

Nicaragua 2 

Norway 60 

Panama .5 

Paraguay 2 

Peru 25 

Philippine Commonwealth 15 

Poland 125 

Union of South Africa 100 

Union of Soviet Socialist 

Republics * 1200 

United Kingdom 1300 

United States 2750 

Uruguay 15 

Venezuela 15 

Yugoslavia 60 



1 Subsequent changes In membership and quotas are not reflected In Schedule A above. 
1 The quota of Denmark shall be determined by the Fund after the Danish Government 
has declared Its readiness to sign this Agreement but before signature takes place. 



357 

[Schedule B — Provisions With Respect To Repurchase by a 
Member of Its Currency Held by the Fund 

[1. In determining the extent to which repurchase of a member's 
currency from the Fund under Article V, Section 7(b), shall be made 
with each convertible currency and each of the other types of mone- 
tary reserve, the following rule, subject to 2 below, shall apply : 

1(a) If the member's monetary reserves have not increased dur- 
ing the year, the amount payable to the Fund shall be distributed 
among all types of reserves in proportion to the member's hold- 
ings thereof at the end of the year. 

[(6) If the member's monetary reserves have increased during 
the year, a part of the amount payable to the Fund equal to one- 
half of the increase, minus one-half of any decrease in the Fund's 
holdings of the member's currency that has occurred during the 
year, shall be distributed among those types of reserves which 
have increased in proportion to the amount by which each of 
them has increased. The remainder of the sum payable to the 
Fund shall be distributed among all types of reserves in propor- 
tion to the member's remaining holdings thereof. 

[(c) If after the repurchases required under Article V, Section 
7(b), had been made, the result would exceed either of the limits 
specified in Article V, Section 7(c) (i) or (ii), the Fund shall re- 
quire such repurchases to be made by the member proportionately 
in such manner that these limits will not be exceeded. 

[(<7) If after all the repurchases required under Article V, Sec- 
tion 7(6), had been made, the result would exceed the limit spec- 
ified in Article V, Section 7(c) (iii), the amount by which the limit 
would be exceeded shall be discharged in convertible currencies as 
determined by the Fund without exceeding that limit. 

1(e) If a repurchase required under Article V, Section 7(b), 
would exceed the limit specified in Article V, Section 7(c) (iv), 
the amount by which the limit would be exceeded shall be repur- 
chased at the end of the subsequent financial year or years in such 
a way that total repurchases under Article V, Section 7(b), in 
any year would not exceed the limit specified in Article V, Sec- 
tion 7(c) (iv). 
[2. (a) The Fund shall not acquire the currency of any non-member 
under Article V, Section 7(b) and (c) ; (b) Any amount payable in 
the currency of a non-member under 1(a) or 1(b) above shall be paid 
in the convertible currencies of members as determined by the Fund. 
[3. In calculating monetary reserves and the increase in monetary 
reserves during any year for the purpose of Article V, Section 7(6) 
and (c), no account shall be taken, unless deductions have otherwise 
been made by the member for such holdings, of any increase in those 
monetary reserves which is due to currency previously inconvertible 
having become convertible during the year; or to holdings which are 
the proceeds of a long-term or medium-term loan contracted during 
the year; or to holdings which have been transferred or set aside for 
repayment of a loan during the subsequent year. 

[4. In the case of members whose metropolitan territories have been 
occupied by the enemy, gold newly produced during the five years 
after the entry into force of this Agreement from mines located within 



358 

their metropolitan territories shall not be included in computations of 
their monetary reserves or of increases in their monetary reserves. 

[5. In calculating monetary reserves and the increase in monetary 
reserves during any year for the purpose of Article V, Section 7(b) 
and ((?), the Fund may decide in its discretion, on the request of a 
member, that deductions shall be made for obligations outstanding as 
the result of transactions between members under a reciprocal facility 
by which a member agrees to exchange on demand its currency for 
the currency of the other member up to a maximum amount and on 
terms requiring that each such transaction be reversed within a speci- 
fied period not in excess of nine months. 

[6. In calculating monetary reserves and the increase in monetary 
reserves for the purpose of Article V, Section 7(b) and (c), Article 
XIX (e) shall apply except that the following provision shall apply 
at the end of a financial year if it was in effect at the beginning of that 
year : 

A member's monetary reserves shall be calculated by deducting 
from its central holdings the currency liabilities to the Treasuries, 
central bank, stabilization funds, or similar fiscal agencies of 
other members or non-members specified under (d) above, to- 
gether with similar liabilities to other official institutions and 
other banks in the territories of members, or non-members speci- 
fied under (d) above. To these net holdings shall be added the 
sums deemed to be official holdings of other official institutions 
and other banks under (c) above. J 

Schedule B — Transitional Provisions With Respect to Repurchase, 
Payment of Additional Subscriptions, Gold, and Certain Opera- 
tional Matters 

1. Repurchase obligations that have accrued pursuant to Article V, 
Section 7(b) before the date of the second amendment of this Agree- 
ment and that remain undischarged at that date shall be discharged 
not later than the date or dates at which the obligations had to be dis- 
charged in accordance ivith the provisions of this Agreement before 
the second amendment. 

2. A member shall discharge with special drawing rights any obliga- 
tion to pay gold to the Fund in repurchase or as a subscription that is 
outstanding at the date of the second amendment of this Agreement, 
but the Fund may prescribe that these payments may be made in whole 
or in part in the currencies of other members specified by the Fund. 
A non-participant shall discharge an obligation that must be paid in 
special drawing rights pursuant to this provision with the currencies 
of other members specified by the Fund. 

3. For the purposes of 2 above 0.888 671 gram of fine gold shall be 
equivalent to one special draioing right, and the amount of currency 
payable under 2 above shall be determined on that basis and on the m 
basis of the value of the currency in terms of the special drawing right 
at the date of discharge. 

4. A member's currency held by the Fund in excess of seventy-five 
percent of the member 's quota at the date of the second amendment of 
this Agreement and not subject to repurchase under 1 above shall be 
repurchased in accordance with the following rules: 



359 

(i) Holdings that resulted from a purchase shall be repur- 
chased in accordance with the policy on the use of the Fund's 
general resources under which the purchase was made. 

(ii) Other holdings shall be repurchased not later than jour 
years after the date of the second amendment of this Agreement. 

5. Repurchases under 1 above that are not subject to 2 above, repur- 
chases under %, above, and any specification of currencies under 2 above 
shall be in accordance with Article V , Section 7(i). 

6. All rules and regulations, rates, procedures, and decisions in effect 
at the date of the second amendment of this Agreement shall remain in 
effect until they are changed in accordance with the provisions of this 
Agreement. 

7. To the extent that arrangements equivalent in effect to (a) and 
(b) below have not been completed before the date of the second amend- 
ment of this Agreement, the Fund shall 

(a) sell up to 25 million ounces of fine gold held by it on August 
31, 1975 to those members that were members on that date and 
that agree to buy it, in proportion to their quotas on that date. The 
sale to a member under this subparagraph (a) shall be made in ex- 
change for its currency and at a price equivalent at the time of 
sale to one special drawing right per 0.888 671 gram of fine gold, 
and 

(b) Sell up to 25 million ounces of fine gold held by it on August 
31, 1975 for the benefit of developing members that were members 
on that date, provided, however, that the part of any profits or 
surplus value of the gold that corresponds to the proportion of 
such a member's quota on August 31, 1975 to the total of the quo- 
tas of all members on that date shall be transferred directly to 
each such member. The requirements under Article V, Section 12 
(c) that the Fund consult a member, obtain a, member's concur- 
rence, or exchange a member's currency for the currencies of other 
members in certain circumstances shall apply with respect to cur- 
rency received, by the Fund as a result of sales of gold under this 
provision, other than sales to a member in return for its own cur- 
rency, and placed in the General Resources Account. 

Upon the sale of gold under this paragraph 7, an amount of the pro- 
ceeds in the currencies received equivalent at the time of sale to one 
special draining right per 0.888 671 gram of fine gold shall be placed in 
the General Resources Account and other assets held by the Fund un- 
der arrangements pursuant to (b) ahore shall be held separately from 
the general resources of the Fund. Assets that remain subject to disposi- 
tion by the Fund upon termination of arrangements pursuant t-o (b) 
above shall be transferred to the Special Disbursement Account. 

Schedule C — Par Values 

1. The Fund shall notify members that par values may be established 
for the purposes of this Agreement, in, accordance with Article IV, 
Sections 1, 3, 4, and 5 and this Schedule, in terms of the special draw- 
ing right, or in terms of such other common denominator as is pre- 
scribed by the Fund. The common denominator shall not be gold or a 
currency. 



360 

2. A member that intends to establish a par value for its currency 
shall propose a par value to the Fund within a reasonable time after 
notice is given under 1 above. 

3. Any member that does not intend to establish a par value for its 
currency under 1 above shall consult with the Fund and ensure that its 
exchange arrangements are consistent with the purposes of the Fund 
and are adequate to fulfill its obligations under Article IV, Section 1. 

i. The Fund shall concur in or object to a proposed par value within 
a reasonable period after receipt of the proposal. A proposed par value 
shall not take effect for the purposes of this Agreement if the Fund 
objects to it, and the member shall be subject to 3 above. The Fund shall 
not object because of the domestic social or political policies of the 
member proposing the par value. 

5. Each member that has a par value for its currency undertakes to 
apply appropriate measures consistent with this Agreement in order to 
ensure that the maximum and the minimum rates for spot exchange 
transactions taking place within its territories between its cun*ency and 
the currencies of other members maintaining par values shall not differ 
from parity by more than four and one-half percent or by such other 
margin or margins as the Fund may adopt by an eighty -five percent 
majority of the total voting power. 

6. A member shall not propose a change in the par value of its cur- 
rency except to correct, or prevent the emergence of, a fundamental 
disequilibrium. A change may be made only on the proposal of the 
member and only after consultation with the Fund. 

7. When a change is projwsed, the Fund shall concur in or object 
to the proposed par value within a reasonable period after receipt of 
the proposal. The Fund shall concur if it is satisfied that the change 
is necessary to connect, or prevent the emergence of, a fundamental 
disequilibrium. The Fund shall not object because of the domestic so- 
cial or political policies of the member proposing the change. A pro- 
posed change in par value shall not take effect for the purposes of this 
Agreement if the Fund objects to it. If a member changes the par 
value of its currency despite the objection of the Fund, the member 
shall be subject to Article XXVI, Section 2. Maintenance of an un- 
realistic par value by a member shall be discouraged by the Fund. 

8. The par value of a members currency established under this 
Agreement shall cease to exist for the purposes of this Agreement if 
the member informs the Fund that it intends to terminate the par 
value. The Fund may object to the termination of a par value by a 
decision taken by an eighty -five percent majority of the total voting 
power. If a member terminates a par value for its currency despite 
the objection of the Fund, the member shall be subject to Article 
XXVI, Section 2. A par value established under this Agreement shall 
cease to exist for the purposes of this Agreement if the member ter- 
minates the par lvalue despite the objection of the Fund, or if the 
Fund finds that the member does not maintain rates for a substantial 
volume of exchange transactions in accordance with 5 above, provided 
that the Fund may not make such finding unless it has consulted the 
member and given it sixty days notice of the Fund's intention to con- 
sider whether to make a finding. 

0. If the par value of the currency of a member has ceased to exist 
under S above, the member shall consult with the Fund and ensure 



361 

that its exchange arrangements are consistent with the purposes of 
the Fund and arc adequate to fulfill its obligations under Article /F, 
Section 1. 

10. A member for whose currency the par value has ceased to exist 
under 8 above may, at any time, propose a new par value for its 
currency. 

11. Noticithstanding above, the Fund, by a seventy percent ma- 
jority of the total voting power, may make uniform proportionate 
changes in all par values if the special drawing right is the common 
denominator and the changes will not affect the value of the special 
drawing right. The par value of a member's currency shall, however, 
not be changed under this provision if. within seven days after the 
Fund's action, the membo' informs the Fund that it does not ivish 
the par value of its currency to be changed by such action. 

Schedule D — Council 

1. (a) Each member that appoints an Executive Director and each 
group of members that has the number of votes eillotted to them cast 
by an elected Executive Director shall appoint to the Council one Coun- 
cillor, who shall be a Govevnor, Minister in the government of a meyn- 
ber, or person of comparable rank, and may appoint not more than 
seven Associates. The Board of Governors may change, by an eighty- 
five percent majority of the total voting powei\ the number of Asso- 
ciates who may be appointed. A Councillor or Associate shall serve 
until a new appointment is made or until the next regular election of 
Executive Directors, whichever shall occur sooner. 

(b) Executive Directors, or in their absence their Alternates, and 
Associates shall be entitled to attend meetings of the Council, unless 
the Council decides to hold a restricted session. Each ?)u mber and each 
group of members that appoints a Councillor shall appoint an Alter- 
nate who shall be entitled to attend a meeting of the Council when 
the Councillor is not present, and shall have full power to act for the 
Councillor. 

2. (a) The Council shall supervise the management and adaptation 
of the international monetary system, including the continuing opera- 
tion of the adjustment process and developments in global liquidity, 
and in this connection shall review developments in the transfer of real 
resources to developing countries. 

(b)^ The Council shall consider proposals pursuant to Article 
XXVIII {a) to amend the Articles of Agreement. 

3. (a) The Board of Governors may delegate to the Council author- 
ity to exercise any powers of the Board of Governors except the powers 
conferred directly by this Agreement on the Board of Governors. 

(b) Each Councillor shall be entitled to cast the number of votes 
allotted under Article XII. Section 5 to the member or group of mem- 
bers appointing him. A Councillor appointed by a group of members 
may cast separately the votes allotted to each member in the group. If 
the number of votes allotted to a member cannot be cast by an Execu- 
tive Director, the member may make arrangements with a Councillor 
for casting the number of rotes allotted to the member. 

(c) The Council shall not take any action pursuant to powers dele- 
gated by the Board of Governors that is inconsistent with any action 



362 

taken by the Board of Governors and the Executive Board shall not 
take any action pursuant to powers delegated by the Board of Gov- 
ernors that is inconsistent with any action taken by either the Board of 
Governors or the Council. 

4. The Council shall select a Councillor as chairman, shall adopt 
regulations as may be necessary or appropriate to perform its func- 
tions, and shall determine any aspect of its procedure. The Council 
shall hold such meetings as may be provided for by the Council or 
called by the Executive Board. 

5. (a) The Council shall have powers corresponding to those of 
the Executive Board under the following provisions: Article XII, 
Section 2(c), (f), (g). and (j) ; Article XVIII, Section 4(a) and 
Section b(c) (iv) ; Article XXIII, Section 1; and Article XXVII, 
Section 1 (a) . 

(b) For decisions by the Council on matters pertaining exclusively 
to the Special Drawing Rights Department only Councillors appointed 
by a member that is a participant or a group of members at least one 
member of which is a participant shall be entitled to vote. Each of 
these Councillors shall be entitled to cast the number of votes allotted 
to the member which is a participant that appointed him or to the 
members that are participants in the group of members that appointed 
him, and may cast the votes allotted to a participant with which ar- 
rangements have been made pursuant to the last sentence of 3(b) 
above. 

(c) The Council may by regulation establish a procedure whereby 
the Executive Board may obtain a vote of the Councillors on a specific 
question without a meeting of the Council when in the judgment of 
the Executive Board an action must be taken by the Council which 
should not be postponed until the next meeting of the Council and 
which does not warrant the calling of a special meeting. 

(d) Article IX, Section 8 shall apply to Councillors^ their Alter- 
nates, and Associates, and to any other person entitled to attend a 
meeting of the Council. 

(e) For the purposes of (b) and 3(b) above, an agreement under 
Article XII, Section 3(i) (ii) by a member, or by a member that is a 
participant, shall entitle a Councillor to vote and cast the number of 
votes allotted to the member. 

6. The first sentence of Article XII, Section 2(a) shall be deemed 
to include a reference to the Council. 

Schedule [C] E — Election of Executive Directors 

1. The election of the elective executive directors shall be by ballot 
of the governors eligible to vote [under Article XII, Section 3 (b) 
(iii) and (iv)]. 

2. In balloting for the [five directors] Executive Directors to be 
elected [under Article XII, Section 3(&) (?//)], each of the governors 
eligible to vote shall cast for one person all of the votes to which he is 
entitled under Article XII, Section 5(a). The [five] fifteen persons 
receiving the greatest number of votes shall be Executive directors, 
provided that no person who received less than [nineteen] four per- 
cent of the total number of votes that can be cast (eligible votes) shall 
be considered elected. 



363 

3. When [five] fifteen persons are not elected in the first ballot, a 
second ballot shall be held in which [the person who received the lowest 
number of votes shall be ineligible for election and in which] there 
shall vote only (a) those governors who voted in the first ballot for a 
person not elected, and (b) those governors whose votes for a person 
elected are deemed under 4 below to have raised the votes cast for that 
person above [twenty] nine percent of the eligible votes. // in the 
second ballot there are more candidates than the number of Executive 
Directors to be elected* the person who received the lowest number of 
votes in the first ballot shall be ineligible for election. 

4. In determining whether the votes cast by a governor are to be 
deemed to have raised the total of any person above [twenty] nine 
percent of the eligible votes the [twenty] nine percent shall be deemed 
to include, first, the votes of the governor casting the largest number 
of votes for such person, then the votes of the governor casting the 
next largest number, and so on until [twenty] nine percent is reached. 

5. Any governor part of whose votes must be counted in order to 
raise the total of any person above [nineteen] four percent shall be 
considered as casting all of his votes for such person even if the total 
votes for such person thereby exceeded [twenty] nine percent. 

6. If, after the second ballot, [five] fifteen persons have not been 
elected, further ballots shall be held on the same principles until [five] 
fifteen persons have been elected, provided that after [four] fourteen 
persons are elected, the [fifth] fifteenth may be elected by a simple 
majority of the remaining votes and shall be deemed to have been 
elected by all such votes. 

[7. The directors to be elected by the American Republics under 
Article XII, Section 3 (b) (iv) shall be elected as follows: 

[(a) Each of the directors shall be elected separately. 

[(£>) In the election of the first director, each governor repre- 
senting an American Republic eligible to participate in the elec- 
tion shall cast for one person all the votes to which he is entitled. 
The person receiving the largest number of votes shall be elected 
provided that he has received not less than forty-five percent of 
the total votes. 

[(<?) If no person is elected on the first ballot, further ballots 
shall be held, in each of which the person receiving the lowest 
number of votes shall be eliminated, until one person received a 
number of votes sufficient for election under (b) above. 

[(V/) Governors whose votes contributed to the election of the 
first director shall take no part in the election of the second di- 
rector. 

[(<°) Persons who did not succeed in the first election shall not 
bo ineligible for election as the second director. 

[(/) A majority of the votes which can be cast shall be required 
for election of the second director. If at the first ballot no person 
receives a majority, further ballots shall be held in each of which 
the person receiving the lowest number of votes shall be eliminated 
until some person obtains a majority. 

[(#) The second director shall be deemed to have been elected 
by all the votes which could have been cast in the ballot securing 
his election.] 



364 

Schedule [D] J — Settlement of Accounts with Members 

Withdrawing 

[1. The Fund shall be obligated to pay to a member withdrawing an 
amount equal to its quota, plus any other amounts due to it from the 
Fund, less any amounts due to the Fund, including charges accruing 
after the date of its withdrawal ; but no payment shall be made until 
six months after the date of withdrawal. Payments shall be made in 
the currency of the withdrawing member.] 

1. The settlement of accounts with respect to the General Resources 
Account shall be made according to 1 to G of this Schedule. The Fund 
shall be obligated to pay to a member withdrawing an amount equal 
to its quota, plus any other amounts due to it from the Fund, less any 
amounts due to the Fund, including charges accruing after the date of 
its withdrawal; but no payment shall be made until six months after 
the date of withdrawal. Payments shall be made in the currency of the 
withdrawing member, and for this purpose the Fund may transfer to 
the General Resources Account holdings of the members currency 
in the Special Disbursement Account or in the Investment Account in 
exchange for an equivalent amount of the currencies of other mem- 
bers in the General Resources Account selected by the Fund with their 
concurrence. 

2. If the Fund's holdings of the currency of the withdrawing mem- 
ber are not sufficient to pay the net amount due from the Fund, the 
balance shall be paid in [gold] a freely it suable currency, or in such 
other manner as may be agreed. If the Fund and the withdrawing 
member do not reach agreement within six months of the date of 
withdrawal, the currency in question held by the Fund shall be paid 
forthwith to the withdrawing member. Any balance due shall be paid 
in ten half-yearly installments during the ensuing five years. Each 
such installment shall be paid, at the option of the Fund, either in the 
currency of the withdrawing member acquired after its withdrawal 
or [by the delivery of gold] in a. freely usuable currency. 

3. If the Fund fails to meet any installment which is due in accord- 
ance with the preceding paragraphs, the withdrawing member shall 
be entitled to require the Fund to pay the installment in any currency 
held by the Fund with the exception of any currency which has been 
declared scarce under Article VII, Section 3. 

4. If the Fund's holdings of the currency of a withdrawing member 
exceed the amount due to it, and if agreement on the method of settling 
accounts is not reached within six months of the date of withdrawal, 
the former member shall be obligated to redeem such excess currency 
in [gold or, at is option, in the currencies of members which at the time 
of redemption are convertible] in a freely usuable currency. Redemp- 
tion shall be made at the [parity existing] rates at which the Fund- 
would sell such currencies at the time of withdrawal from the Fund. 
The withdrawing member shall complete redemption within five years 
of the date of withdrawal or within such longer period as may be fixed 
by the Fund, but shall not be required to redeem in any half-yearly 
period more than one-tenth of the Fund's excess holdings of its cur- 
rency at the date of withdrawal plus further acquisitions of the cur- 
rency during such half-yearly period. If the withdrawing member 



365 

does not fulfill this obligation the Fund may in an orderly manner 
liquidate in any market the amount of currency which should have 
been redeemed. 

5. Any member desiring to obtain the currency of a member which 
has withdrawn shall acquire it by purchase from the Fund, to the 
extent that such member has access to the general resources of the 
Fund and that such currency is available under 4 above. 

6. The withdrawing member guarantees the unrestricted use at all 
times of the currency disposed of under 4 and 5 above for the purchase 
of goods or for payment of sums due to it or to persons within its 
territories. It shall compensate the Fund for any loss resulting from 
the difference between the [par] value of its currency in terms of the 
special drawing right on the date of withdrawal and the value real- 
ized in terms of the special drawing right by the Fund on disposal 
under 4 and 5 above. 

[7] 10. In the event of the Fund going into liquidation under Article 
[XVI] XXVII, Section 2, within six months of the date on which 
the member withdraws, the account between the Fund and that gov- 
ernment shall be settled in accordance with Article [XVI] XXVII, 
Section 2, and Schedule [E] K. 

7. If the withdrawing member is indebted to the Fund as the result 
of transactions conducted through the Special Disbursement Account 
under Article V, Section 12(f) (ii), the indebtedness shall be dis- 
charged in accordance with the terms of the indebtedness. 

8. If the Fund holds the withdrawing member s currency in the 
Special Disbursement Account or in the Investment Account, the Fund 
may in an orderly manner exchange in any market for the currencies of 
members the amount of the currency of the withdrawing member re- 
maining in each account after use under 1 above, and the proceeds of 
the exchange of the amount in each account shall be kept in that ac- 
count. Paragraph 5 above and the first sentence of above shall apply 
to the withdrawing member's currency. 

9. If the Fund holds obligations of the withdrawing member in the 
Special Disbursement Account pursuant to Article F, Section 12(h), 
or in the Investment Account, the Fund may hold them until the elate 
of maturity or dispose of them sooner. Paragraph 8 above shall apply 
to the proceeds of such disin vestment. 

Schedule [E] K — Administration- of Liquidation 

1. In the event of liquidation the liabilities of the Fund other than 
the repayment of subscriptions shall have priority in the distribution 
of the assets of the Fund. In meeting each such liability the Fund shall 
use its assets in the following order : 

(a) the currency in which the liability is payable ; 

(b) gold; 

(c) all other currencies in proportion so far as may be practi- 
cable, to the quotas of the members. 

2. After the discharge of the Fund's liabilities in accordance with 1 
above, the balance of the Fund's assets shall be distributed and appor- 
tioned as follows : 

[(a) The Fund shall distribute its holdings of gold among the 
members whose currencies are held by the Fund in amounts less 



366 

than their quotas. These members shall share the gold so dis- 
tributed in the proportions of the amounts by which their quotas 
exceed the Fund's holdings of their currencies. 

£(b) The Fund shall distribute to each member one-half the 
Fund's holdings of its currency but such distribution shall not ex- 
ceed fifty percent of its quota. 

[(<?) The Fund shall apportion the remainder of its holdings of 
each currency among all the members in proportion to the amounts 
due to each member after the distributions under (a) and (b) 
above.] 

(a) (i) The Fund shall calculate the value of gold held on August 31, 
1975 that it continues to hold on the date of the decision to liquidate. 
The calculation shall be made in accordance with 9 below and also 
on the basis of one special drawing right per 0.888 671 gram of fine 
gold on the date of liquidation. Gold equivalent to the excess of the 
former value over the latter shall be distributed to tho*e members that 
were members on August 31, 1975 in ])roportion to their quotas on that 
date. 

(ii) The Fund shall distribute any assets held in the Special Dis- 
bursement Account on the date of the decision to liquidate to those 
members that were members on August 31, 1975 in proportion to their 
quotas on that date. Each type of asset shall be distributed propor- 
tionately to members. 

(b) The Fund shall distribute its remaining holdings of gold among 
the members whose currencies are held by the Fund in amounts less 
than their quotas in the proportions* but not in excess of. the amounts 
by which their quotas exceed the Fund's holdings of their currencies. 

(c) The Fund shall distribute to each member one-half the FuncVs 
holdings of its currency but such distribution shall not exceed fifty 
percent of its quota. 

(d) The Fund shall apportion the remainder of its holdings of gold 
and each currency. 

(i) Among all the members in proportion to, but not in excess 
of, the amounts due to each member after the distributions under 
(b) and (c) above, provided that distribution under 2(a) above 
shall not be taken into account for determining the amounts due. 
and 

(ii) Any excess holdings of gold and currency among all the 
members in proportion to their quotas. 

3. Each member shall redeem the holdings of its currency appor- 
tioned to other members under 2[(c)] (d) above, and shall agree with 
the Fund within three months after a decision to liquidate upon an 
orderly procedure for such redemption. 

4. If a member has not reached agreement with the Fund within 
the three-month period referred to in 3 above, the Fund shall use the 
currencies of other members apportioned to that member under 2[(c)] 
(d) above to redeem the currency of that member apportioned to other 
members. Each currency apportioned to a member which has not 
reached agreement shall be used, so far as possible, to redeem its cur- 
rency apportioned to the members which have made agreements witli 
the Fund under 3 above. 

5. If a member has reached agreement with the Fund in accordance 
with 3 above, the Fund shall use the currencies of other members ap- 



367 

portioned to that member under 2[(c)] (d) above to redeem the cur- 
rency of that member apportioned to other members which have made 
agreements with the Fund under 3 above. Each amount so redeemed 
shall be redeemed in the currency of the member to which it was ap- 
portioned. 

6. After carrying out the steps in the preceding paragraphs, the 
Fund shall pay to each member the remaining currencies held for its 
account. 

7. Each member whose currency has been distributed to other 
members under 6 above shall redeem such currency [in gold or, at its 
option,] in the currency of the member requesting redemption, or in 
such other manner as may be agreed between them. If the members 
involved do not otherwise agree, the member obligated to redeem shall 
complete redemption within five years of the date of distribution, but 
shall not be required to redeem in any half-year period more than one- 
tenth of the amount distributed to each other member. If the member 
does not fulfdl this obligation, the amount of currency which should 
have been redeemed may be liquidated in an orderly manner in any 
market. 

8. Each member whose currency has been distributed to other mem- 
bers under 6 above guarantees the unrestricted use of such currency 
at all times for the purchase of goods or for payment of sums due to 
it or to persons in its territories. Each member so obligated agrees to 
compensate other members for any loss resulting from the difference 
between the [par] value of its currency in terms of the special draw- 
ing right on the date of the decision to liquidate the Fund and the value 
in temns of the special drawing right realized by such members on dis- 
posal of its currency. 

9. The Fund shall determine the value of gold under this Schedule 
on the basis of prices in the market. 

10. For the purposes of this Schedule, quotas shall be deemed to have 
been increased to the full extent to which they could hare been 
increased in accordance with Article III. Section 2(b) of this Agree- 
ment. 

Schedule F — Designation 

During the first basic period the rules for designation shall be as 
follows : 

(a) Participants subject to designation under Article [XXV] 
XIX, Section 5(a) (i), shall be designated for such amounts as 
will promote over time equality ill the ratios of the participants' 
holdings of special drawing rights in excess of their net cumula- 
tive allocations to their official holdings of gold and foreign ex- 
change. 

(b) The formula to give effect to (a) above shall be such that 
participants subject to designation shall be designated : 

(i) in proportion to their official holdings of gold and for- 
eign exchange when the ratios described in (a) above are 
equal ; and 

(ii) in such manner as gradually to reduce the difference 
between the ratios described in (a) above that are low and 
the ratios that aro high. 



368 

Schedule G — Reconstruction 

1. During the first basic period the rules for reconstitution shall be 
as follows : 

(a) (i) A participant shall so use and reconstitute its holdings 
of special drawing rights that, five years after the first allocation 
and at the end of each calendar quarter thereafter, the average 
of its total daily holdings of special drawing rights over the 
most recent five-year period will bo not less than thirty percent 
of the average of its daily net cumulative allocation of special 
drawing rights over the same period. 

(ii) Two years after the first allocation and at the end of each 
calendar month thereafter the Fund shall make calculations for 
each participant so as to ascertain whether and to what extent 
the participant would need to acquire special drawing rights be- 
tween the date of the calculation and the end of any five-year 
period in order to comply with the requirement in (a) (i) above. 
The Fund shall adopt regulations with respect to the bases on 
which these calculations shall be made and with respect to the 
timing of the designation of participants under Article [XXV] 
XIX, Section 5 (a) (ii) , in order to assist them to comply with the 
requirement in (a) (i) above. 

(iii) The Fund shall give special notice to a participant when 
the calculations under (a) (ih above indicate that it is unlikely 
that the participant will be aole to comply with the requirement 
in (a) (i) above unless it ceases to use special drawing rights for 
the rest of the period for which the calculation was made under 
(a) (ii) above. 

(iv) A participant that needs to acquire special drawing lights 
to fulfill this obligation shall be obligated and entitled to obtain 
them, [at its option for gold or] for currency acceptable to the 
Fund, in a transaction with the Fund conducted through the 
General Resources Account. If sufficient special drawing rights to 
fulfill this obligation cannot be obtained in this way, the partici- 
pant shall be obligated and entitled to obtain them with a freely 
u-suable currency [convertible in fact] from a participant which 
the Fund shall specify. 

(&) Participants shall also pay due regard to the desirability 
of pursuing over time a balanced relationship between their hold- 
ings of special drawing rights and their [holdings of gold and 
foreign exchange and their reserve positions in the Fund J other 
reserves. 

2. If a participant fails to comply with the rules for reconstitution, 
the Fund shall determine whether or not the circumstances justify 
suspension under Article [XXIX] XXIII, Section 2(b). 

Schedule H — Termination of Participation 

1. If the obligation remaining after the setoff under Article [XXX] 
XXIV, Section 2(6), is to the terminating participant and agreement 
on settlement between the Fund and terminating participant is not 
reached within six months of the date of termination, the Fund shall 
redeem this balance of special drawing rights in equal half-yearly 



369 

installments within a maximum of five years of the date of termina- 
tion. The Fund shall redeem this balance as it may determine, either 
(a) by the payment to the terminating participant of the amounts pro- 
vided by the remaining participants to the Fund in accordance with 
Article [XXX] XXIV, Section 5, or (b) by permitting the terminat- 
ing participant to use its special drawing rights to obtain its own cur- 
rency or a freely useable currency [convertible in fact] from a par- 
ticipant specified by the Fund, the General Resources Account, or any 
other holder. 

2. If the obligation remaining after the setoff under Article [XXX] 
XXIV, Section 2 (b) , is to the Fund and agreement on settlement is not 
reached within six months of the date of termination, the terminating 
participant shall discharge this obligation in equal half-year install- 
ments within three years of the date of termination or within such 
longer period as may be fixed by the Fund. The terminating partici- 
pant shall discharge his obligation, as the Fund may determine, either 
(a) by the payment to the Fund of a freely usudble currency [con- 
vertible in fact or gold at the option of the terminating participant], 
or (b) by obtaining special drawing rights, in accordance with Article 
[XXX] XXIV, Section C>, from the General Resources Account 
or in agreement with a participant specified by the Fund or from any 
other holder, and the setoff of these special drawing rights against 
the installment due. 

3. Installments under either 1 or 2 above shall fall due six months 
after the date of termination and at intervals of six months there- 
after. 

4. In the event of the Special Drawing [Account] Rights Depart- 
ment going into liquidation under Article [XXXI] XXY within six 
months of the date a participant terminates its participation, the settle- 
ment between the Fund and that government shall be made in ac- 
cordance will Article [XXXI] XXV and Schedule I. 

Schedule I — Administration of Liquidation of the Special Draw- 
ing [Account] Rights J^i p.\rtmh\t 

1. In the event of liquidation of the Special Drawing [Account] 
Rights Department, participants shall discharge their obligations to 
the Fund in ten half-yearly installments, or in such longer period as 
the Fund may decide is needed, in a freely usuablc currency [conver- 
tible in fact] and the currencies of participants holding special draw- 
ing rights to be redeemed in any installment to the extent of such 
redemption, as determined by the Fund. The first half-yearly pay- 
ment shall be made six months after the decision to liquidate the 
Special Drawing [Account] Rights Department. 

2. If it is decided to liquidate the Fund within six months of the 
date of the decision to liquidate the Special Drawing [Account] Rights 
Department, the liquidation of the Special Drawing [Account] Rights 
Department shall not proceed until special drawing rights held in the 
General Resources Account have been distributed in accordance with 
the following rule : 

After the distribution made under 2(a) [of Schedule E] and 
(b) of Schedule K, the Fund shall apportion its special drawing 



370 

rights held in the General Resources Account among all members 
that are participants in proportion to the amounts due to each 
participant after the distributions under 2[ (a)] (6). To determine 
the amount due to each member for the purpose of apportioning 
the- remainder of its holdings of each currency under [2(c) of 
Schedule E] 2(d) of Schedule K, the Fund shall deduct the dis- 
tribution of special drawing rights made under this rule. 

3. With the amounts received under 1 above, the Fund shall redeem 
special drawing rights held by holders in the following manner and 
order : 

(a) Special drawing rights held by governments that have 
terminated their participation more than six months before the 
date the Board of Governors decides to liquidate the Special 
Drawing [Account] Rights Department shall be redeemed in ac- 
cordance with the terms of any agreement under Article [XXX] 
XXIV or Schedule H. 

(b) Special drawing rights held by holders that are not par- 
ticipants shall be redeemed before those held by participants, 
and shall be redeemed in proportion to the amount held by each 
holder. 

(c) The Fund shall determine the proportion of special draw- 
ing rights held by each participant in relation to its net cumula- 
tive allocation. The Fund shall first redeem special drawing 
rights from the participants with the highest proportion until 
this proportion is reduced to that of the second highest propor- 
tion ; the Fund shall then redeem the special drawing rights held 
by these participants in accordance with their net cumulative al- 
locations until the proportions are reduced to that of the third 
highest proportion; and this process shall be continued until the 
amount available for redemption is exhausted. 

4. Any amount that a participant will be entitled to receive in 
redemption under 3 above shall be set off against any amount to be 
paid under 1 above. 

5. During liquidation the Fund shall pay interest on the amount of 
special drawing rights held by holders, and each participant shall pay 
charges on the net cumulative allocation of special drawing rights to 
it less the amount of any payments made in accordance with 1 above. 
The rates of interest and charges and the time of payment shall be 
determined by the Fimd. Payments of interest and charges shall be 
made in special drawing rights to the extent possible. A participant 
that does not hold sufficient special drawing rights to meet any charges 
shall make the payment with [gold or] a currency specified by the 
Fund. Special drawing rights received as charges in amounts needed 
for administrative expenses shall not be used for the payment of in- 
terest, but shall be transferred to the Fund and shall be redeemed first 
and with the currencies used by the Fund to meet its expenses. 

6. While a participant is in default with respect to any payment 
required by 1 or 5 above, no amounts shall be paid to it in accordance 
with [2] 3 or 5 above. 

7. If after the final payments have been made to participants each 
participant not in default does not hold special drawing rights in the 
same proportion to its net cumulative allocation, those participants 



371 

holding a lower proportion shall purchase from those holding a higher 
proportion such amounts in accordance with arrangements made by 
the Fund as will make the proportion of their holdings of special 
drawing rights the same. Each participant in default shall pay to 
the Fund its own currency in an amount equal to its default. The 
Fund shall apportion this currency and any residual claims among 
participants in proportion to the amount of special drawing rights 
held by each and these special drawing rights shall bo canceled. The 
Fund shall then close the books of the Special Drawing [Account] 
Rights Department and all of the Fund's liabilities arising from the 
allocations of special drawing rights and the administration of the 
Special Drawing [Account] Rights Department shall cease. 

8. Each participant whose currency is distributed to other partic- 
ipants under this Schedule guarantees the unrestricted use of such 
currency at all times for the purchase of goods or for payments of 
sums due to it or to pei*sons in its territories. Each participant so obli- 
gated agrees to compensate other participants for any loss resulting 
from the difference between the value at which the Fund distributed 
its currency under this Schedule and the value realized by such par- 
ticipants on disposal of its currency. 



b. Text of the Decision of the Executive Directors of the Inter- 
national Monetary Fund, January 5, 1962 

INTERNATIONAL MONETARY FUND 

Executive Board Decision No. 1289- ( 62/1 ) . 
Subject: General Arrangements To Borrow. 

Preamble 

In order to enable the International Monetary Fund to fulfill more 
effectively its role in the international monetary system in the new 
conditions of widespread convertibility, including greater freedom for 
short-term capital movements, the main industrial countries have 
agreed that they will, in a spirit of broad and willing cooperation, 
strengthen the Fund by general arrangements under which they will 
stand ready to lend their currencies to the Fund up to specified amounts 
under Article VII, Section 2 of the Articles of Agreement when sup- 
plementary resources are needed to forestall or cope with an impair- 
ment of the international monetary system in the aforesaid conditions. 
In order to give effect to these intentions, the following terms and 
conditions are adopted under Article VII, Section 2 of the Articles of 
Agreement. 

Paragraph 1. Definitions 

As used in this Decision the term : 

(i) "Articles" means the Articles of Agreement of the Inter- 
national Monetary Fund ; 

(ii) "credit arrangement" means an undertaking to lend to the 
Fund on the terms and conditions of this Decision ; 

(iii) "participant" means a participating member of a par- 
ticipating institution ; 

(iv) "participating institution" means an official institution of 
a member that has entered into a credit arrangement with the 
Fund with the consent of the member ; 

(v) "participating member" means a member of the Fund that 
has entered into a credit arrangement with the Fund ; 

(vi) "amount of a credit arrangement" means the maximum 
amount expressed in units of its currency that a participant under- 
takes to lend to the Fund under a credit arrangement ; 

(vii) "call" means a notice by the Fund to a participant to 
make a transfer under its credit arrangment to the Fund's 
account ; 

(viii) "borrowed currency" means currency transferred to the 
Fund's account under a credit arrangement; 

(ix) "drawer" means a member that purchases borrowed cur- 
rency from the Fund in an exchange transaction or in an exchange 
transaction under a standby arrangement; 

(x) "indebtedness" of the Fund means the amount it is com- 
mitted to repay under a credit arrangement. 

(372) 



373 

Paragraph 2. Credit Arrangements 

A member or institution that adheres to this Decision undertakes to 
lend its currency to the Fund on the terms and conditions of this 
Decision up to the amount in units of its currency set forth in the 
Annex to this Decision or established in acordance with Paragraph 
3(b). 

Paragraph 3. Adherence 

(a) Any member or institution specified in the Annex may adhere 
to this Decision in accordane with Paragraph 3 (c) . 

(b) Any member or institution not specified in the Annex that 
wishes to become a participant may at any time, after consultation 
with the Fund, give notice of its willingness to adhere to this Decision, 
and, if the Fund shall so agree and no participant object, the member 
or institution may adhere in accordance with Paragraph 3(c). When 
giving notice of its willingness to adhere under this Paragraph 3(b) 
a member or institution shall specify the amount, expressed in terms 
of its currency, of the credit arrangement which it is willing to enter 
into, provided that the amount shall not be less than the equivalent at 
the date of adherence of one hundred million United States dollars of 
the weight and fineness in effect on July 1, 1944. 

(c) A member or institution shall adhere to this Decision by de- 
positing with the Fund an instrument setting forth that it has adhered 
in accordance with its law and has taken all steps necessary to enable 
it to carry out the terms and conditions of this Decision. On the de- 
posit of the instrument the member or institution shall be a participant 
as of the date of the deposit or of the effective date of this decision, 
whichever shall be later. 

Paragraph 4. Entry into Force 

This Decision shall become effective when it has been adhered to by 
at least seven of the members or institutions included in the Annex 
with credit arrangements amounting in all to not less than the equiva- 
lent of five and one-half billion United States dollars of the weight and 
fineness in effect on July 1, 1944. 

Paragraph 5. Changes in Amounts of Credit Arrangements 

The amounts of participants' credit arrangements may be reviewed 
from time to time in the light of developing circumstances and changed 
with the agreement of the Fund and all participants. 

Paragraph 6. Initial Procedure 

When a participating member or a member whose institution is a 
participant, approaches the Fund on an exchange transaction or 
stand-by arrangement and the Managing Director, after consultation, 
considers that the exchange transaction or stand-by arrangement is 
necessary in order to forestall or cope with an impairment of the inter- 
national monetary system, and that the Fund's resources need to be 
supplemented for this purpose, he shall initiate the procedure for 
making calls under Paragraph 7. 

Paragraph 7. Calls 

(a) The Managing Director shall make a proposal for calls for an 
exchange transaction or for future calls for exchange transactions 
under a stand-by arrangement only after consultation with Executive 



374 

Directors and participants. A proposal shall become effective only if 
it is accepted by participants and the proposal is then approved by the 
Executive Directors. Each participant shall notify the Fund of the 
acceptance of a proposal involving a call under its credit arrangement. 

(b) The currencies and amounts to be called under one or more of 
the credit arrangements shall be based on the present and prospective 
balance of payments and reserve positions of participating members 
or members whose institutions are participants and on the Fund's 
holdings of currencies. 

(c) Unless otherwise provided in a proposal for future calls ap- 
proved under Paragraph 7(a), purchases of borrowed currency under 
a stand-by arrangement shall be made in the currencies of participants 
in proportion to the amounts in the proposal. 

(d) If a participant on which calls may be made pursuant to Para- 
graph 7(a) for a drawer's purchases under a stand-by arrangement 
gives notice to the Fund that in the participant's opinion, based on the 
present and prospective balance of payments and reserve position, calls 
should no longer be made on the participant or that calls should be for 
a smaller amount, the Managing Director may propose to other par- 
ticipants that substitute amounts be made available under their credit 
arrangements, and this proposal shall be subject to the procedure of 
Paragraph 7(a). The proposal as originally approved under Para- 
graph 7(a) shall remain effective unless and until a proposal for sub- 
stitute amounts is approved in accordance with Paragraph 7(a). 

(e) When the Fund makes a call pursuant to this Paragraph 7, the 
participant shall promptly make the transfer in accordance with the 
call. 

Paragraph 8. Evidence of Indebtedness 

(a) The Fund shall issue to a participant, on its request, nonnego- 
tiable instruments evidencing the Fund's indebtedness to the partici- 
pant. The form of the instruments shall be agreed between the Fund 
and the participant. 

(b) Upon repayment of the amount of any instrument issued under 
Paragraph 8(a) and all accrued interest, the instrument shall be re- 
turned to the Fund for cancellation. If less than the amount of any 
such instrument is repaid, the instrument shall be returned to the Fund 
and a new instrument for the remainder of the amount shall be sub- 
stituted with the same maturity date as in the old instrument. 

Paragraph 9. Interest and Charges 

(a) The Fund shall pay a charge of one-half of one percent on 
transfers made in accordance with Paragraph 7(e). 

(b) The Fund shall pay interest on its indebtedness at the rate of 
one and one-half percent per annum. In the event that this becomes 
different from a basic rate determined as follows : 

the charge levied by the Fund pursuant to Article V, Section 8(a) 
plus the charge levied by the Fund pursuant to Article V, Section 
8(c) (i), as changed from time to time under Article V, Section 
8(e), during the first year after a purchase of exchange from the 
Fund, minus one-half of one percent, 
the interest payable by the Fund shall be changed by the same amount 
as from the date when the difference in the basic rate takes effect 



375 

Interest shall be paid as soon as possible after July 31, October 31, 
January 31, and April 30. 

(c) Interest and charges shall be paid in gold to the extent that 
this can be effected in bars. Any balance not so paid shall be paid in 
United States dollars. 

(d) Gold payable to a participant in accordance with Paragraph 
9(b) or Paragraph 11 shall be delivered at any gold depository of 
the Fund chosen by the participant at which the Fund has sufficient 
gold for making the payment. Such delivery shall be free of any 
charges or costs for the participant. 

Paragraph 10. Use of Borrowed Currency 

The Fund's policies and practices on the use of its resources and 
stand-by arrangements, including those relating to the period of use, 
shall apply to purchases of currency borrowed by the Fund. 

Paragraph 11. Repayment by the Fund 

(a) Subject to the other provisions of this Paragraph 11, the Fund, 
five years after a transfer by a participant, shall repay the participant 
an amount equivalent to the transfer calculated in accordance with 
Paragraph 12. If the drawer for whose purchase participants make 
transfers is committed to repurchase at a fixed date earlier than five 
years after its purchase, the Fund shall repay the participants at that 
date. Repayment under this Paragraph 11(a) or under Paragraph 
11(c) shall be, as determined by the Fund, in the participant's cur- 
rency whenever feasible, or in gold, or, after consultation with the 
participant, in other currencies that arc convertible in fact. Repay- 
ments to a participant under the subsequent provisions of this Para- 
graph 11 shall be credited against transfers by the participant for a 
drawer's purchases in the order in which repayment must be made 
under this Paragraph 11(a). 

(b) Before the date prescribed in Paragraph 11(a), the Fund, after 
consultation with a participant, may make repayment to the partici- 
pant, in part or in full, with any increases in the Fund's holdings of 
the participant's currency that exceed the Fund's working require- 
ments, and participants shall accept such repayment. 

(c) Whenever a drawer repurchases, the Fund shall promptly repay 
an equivalent amount, except in any of the following cases: 

(i) The repurchase is under Article V, Section 7(b) and can 
be identified as being in respect of a purchase of currency other 
than borrowed currency. 

(ii) The repurchase is in discharge of a commitment entered 
into on a purchase of currency other than borrowed currency. 

(iii) The repurchase entitles the drawer to augmented rights 
under a stand-by arrangement pursuant to Section II of Deci- 
sion No. 876- (59/1 5) of the Executive Di recto rs, provided that, 
to the extent that the drawer does not exercise such augmented 
rights, the Fund shall promptly repay an equivalent amount on 
the expiration of the stand-by arrangement. 

(d) Whenever the Fund decides in agreement with a drawer that 
the problem for which the drawer made its purchases has been over- 
come, the drawer shall complete repurchase, and the Fund shall com- 
plete repayment and be entitled to use its holdings of the drawer's 
currency below 75 percent of the drawer's quota in order to complete 
such repayment. 



376 

(e) Repayments under Paragraph 11 (c) and (d) shall be made in 
the order established under Paragraph 11 (a) and in proportion to the 
Fund's indebtedness to the participants that made transfers in respect 
of which repayment is being made. 

(f) .Before the date prescribed in Paragraph 11(a) a participant 
may give notice representing that there is a balance of payments need 
for repayment of part or all of the Fund's indebtedness and requesting 
such repayment. The Fund shall give the overwhelming benefit of any 
doubt to the participant's representation. Repayment shall be made 
after consultation with the participant in the currencies of other mem- 
bers that are convertible in fact, or made in gold, as determined by the 
Fund. If the Fund's holdings of currencies in which repayment should 
be made are not wholly adequate, individual participants shall be 
requested, and will be expected, to provide the necessary balance under 
their credit arrangements. If, not withstanding the expectation that 
the participants will provide the necessary balance, they fail to do so, 
repayment shall be made to the extent necessary in the currency of 
the drawer for whose purchases the participant requesting repayment 
made transfers. For all of the purposes of this Paragraph 11, transfers 
under this Paragraph 11 (f ) shall be deemed to have been made at the 
same time and for the same purchases as the transfers by the partici- 
pant obtaining repayment under this Paragraph 11 (f ) . 

(g) All repayments to a participant in a currency other than its own 
shall be guided, to the maximum extent practicable, by the present and 
prospective balance of payments and reserve positions of the members 
whoso currencies are to be used in repayment. 

(h) The Fund shall at no time reduce its holdings of a drawer's 
currency below an amount equal to the Fund's indebtedness to the 
participants resulting from transfers for the drawer's purchases. 

(i) When any repayment is made to a participant, the amount that 
can bo called for under its credit arrangement in accordance with this 
Decision shall bo restored pro tanto but not beyond the amount of the 
credit arrangement. 

Paragraph 12. Rates of Exchange 

(a) The value of any transfer shall be calculated as of the date of 
tho transfer in terms of a stated number of fine ounces of gold or of 
the United States dollar of the weight and fineness in effect on July 1, 
1944, and the Fund shall be obliged to repay an equivalent value. 

(b) For all of the purposes of this Decision, the equivalent in 
currency of any number of fine ounces of gold or of the United States 
dollar of the weight and fineness in effect on July 1, 1944, or vice 
versa, shall be calculated at the rate of exchange at which the Fund 
holds such currency at the date as of which the calculation is made; 
provided however that the provisions of Decision No. 321- (54/32 J 
of the Executive Directors on Transactions and Computations In- 
volving Fluctuating Currencies, as amended by Decision No. 1245- 
(61/45) and Decision No. 1283-(G1/5G), shall determine the rate of 
exchange for any currency to which that decision, as amended, has- 
been applied. 

Paragraph 13. Transferability 

A participant may not transfer all or part of its claim to repayment 
under a credit arrangement except with the prior consent of the Fund 
and on such terms and conditions as the Fund may approve. 



377 

Paragraph 14. Notices 

Notice to or by a participating member under this Decision shall be 
in writing or by cable and shall be given to or by the fiscal agency 
of the participating member designated in accordance with Article V, 
Section 1 of the Articles and Rule G-l of the Rules and Regulations 
of the Fund. Notice to or by a participating institution shall be in 
writing or by cable and shall be given to or by the participating 
institution. 

Paragraph 15. Amendment 

This Decision may be amended during the period prescribed in 
Paragraph 19(a) only by a decision of the Fund and with the con- 
currence of all participants. Such concurrence shall not be necessary 
for the modification of the Decision on its renewal pursuant to 
Paragraph 19(b). 

Paragraph 16. Withdrawal of Adherence 

A participant may withdraw its adherence to this Decision in 
accordance with Paragraph 19(1)) but may not withdraw within 
the period described in Paragraph 19(a) except with the agreement 
of the Fund and all participants. 

Paragraph 17. Withdrawal from Membership 

If a participating member or a member whose institution is a par- 
ticipant withdraws from membership in the Fund, the participant's 
credit arrangement shall cease at the same time as the withdrawal takes 
effect. The Fund's indebtedness under the credit arrangement shall 
be treated as an amount due from the Fund for the purpose of Article 
XV, Section 3, and Schedule I) of the Article-. 

Paragraph 18. Suspension of Exchange Transactions and 
Liquidation 

(a) The right of the Fund to make calls under Paragraph 7 and 
the obligation to make repayments under Paragraph 11 shall be sus- 
pended during any suspension of exchange transactions under Article 
XVI of the Articles. 

(b) In the event of liquidation of the Fund, credit arrangements 
shall cease and the Fund's indebtedness shall constitute liabilities 
under Schedule E of the Articles. For the purpose of Paragraph 1(a) 
of Schedule E, the currency in which the liability of the Fund shall 
be payable shall be first the participant's currency and then the 
currency of the drawer for whose purchases transfers were made by 
the participant. 

Paragraph 19. Period and Renewal 

(a) x This Decision shall continue in existence for four years from 
its effective date. 

(b) This Decision may be renewed for such period or periods and 
with such modifications, subject to Paragraph 5, as the Fund may 
decide. The Fund shall adopt a decision on renewal and modification, 
if any, not later than twelve months before the end of the period pre- 

l On October 15. 19r,. r >. tlio Executive Directors approved n four vear renewal dating 
from October, 1966 of Executive Board Decision No. 12S9-(62/l). On October 17, 1969. 
%?„£ xecutive Directors approved a five-year period of renewal from October 24. 1970 
(tBD No 2858 (69/97). Oct. 17. 1969). On October 24. 1974, the Executive Directors 
approved a five-year renewal dating from October 2."). 1975. 

20-039 O - 78 - 25 



378 

scribed in Paragraph 19(a). Any participant may advise the Fund 
not less than six months before the end of the period prescribed in 
Paragraph 19(a) that it will withdraw its adherence to the Decision 
as renewed. In the absence of such notice, a participant shall be 
deemed to continue to adhere to the Decision as renewed. Withdrawal 
of adherence in accordance with this Paragraph 19(b) by a partici- 
pant, whether or not included in the Annex, shall not preclude its 
subsequent adherence in accordance with Paragraph 3(b). 

(c) If this Decision is terminated or not renewed, Paragraphs 8 
through 14, 17 and 18(b) shall nevertheless continue to apply in con- 
nection with any indebtedness of the Fund under credit arrangements 
in existence at the date of the termination or expiration of the Deci- 
sion until repayment is completed. If a participant withdraws its 
adherence to this Decision in accordance with Paragraph 1G or Para- 
graph 19(b), it shall cease to be a participant under the Decision, but 
Paragraphs 8 through 14, 17 and 18(b) of the Decision as of the date 
of the withdrawal shall nevertheless continue to apply to any indebted- 
ness of the Fund under the former credit arrangement until repayment 
has been completed. 

Paragraph 20. Interpretation 

Any question of interpretation raised in connection with this Deci- 
sion which does not fall within the purview of Article XVIII of the 
Articles shall be settled to the mutual satisfaction of the Fund, the 
participant raising the question, and all other participants. For the 
purpose of this Paragraph 20 participants shall be deemed to include 
those former participants to which Paragraphs 8 through 14, 17 and 
18(b) continue to apply pursuant to Paragraph 19(c) to the extent 
that any such former participant is affected by a question of inter- 
pretation that is raised. 

Annex 

Participants and amounts of Credit Arrangements 

Units of Pnrtlelnnnt'N Currency 

1. United States of America US$ 2, 000, 000, 000 

2. Deutsche Bundesbank DM 4, 000, 000, 000 

3. United Kingdom £ 357, 142, 857 

4. France NF 2, 715, 381, 428 

5. Italy Lit 343, 750, 000, 000 

6. Japan Yen 90, 000, 000, 000 

7. Canada Can$ 216,216,000 

8. Netherlands f. 724,000,000 

9. Belgium BF 7, 500, 000, 000 

10. Sveriges Riksb